Top 6 Specialty Chemical Stocks To Buy: ICICI Securities

ICICI Securities, a domestic brokerage company, has picked up the specialty chemical sector with various ratings amid a tumultuous stock market and strong global signals. Sudarshan Chemical, EPL, Chemplast Sanmar, Gujarat Fluorochemicals, Tatva Chintan, and Phillips Carbon Black (PCBL) have all received Buy ratings from the brokerage. The brokerage has a Hold rating on Rossari Biotech and Galaxy Surfactants, but a Reduce rating on SRF, Clean Science, and a Sell rating on Navin Fluorine.

The brokerage has said "R-22 prices rose to Rs244/kg (down 5.0% QoQ / up 37.5%) in Q4FY22-TD, but volumes were down 81% YoY to just 325te. This could be partially due to plant shutdown for Gujarat Fluorochemicals, but we are not worried as companies sell their entire quota allocated for full year. In packaging film segment, spread has increased for both BOPET and BOPP."

ICICI Securities has claimed "This is despite anticipation of spreads dipping due to new capacity expansion, while higher margins should keep helping SRF. Lauryl alcohol prices rose again in Jan'22 and now stand at Rs167, up 6.3% QoQ. Inflation in Rossari Biotech's four key raw materials will keep company margins under pressure, while prices have cooled to some extent but are unlikely to sustain in the near term."

"Pigment prices have increased (good for Sudarshan Chemical) on QoQ basis, but it has slightly dipped MoM belying expectations of further inflation. EPL will continue to face challenges due to elevated polymer prices. PTFE prices have risen 13.7% YoY to Rs939, in line with GFL commentary about price increase; PTFE volumes grew 20% YoY in Jan'22. Carbon black export volumes have grown 62% YoY, hence PCBL will see higher mix of exports (which have lower spreads compared to domestic sales)," the brokerage says.

Specialty Chemical Stocks To Watch Now

Stocks	Rating
SRF	REDUCE
Navin Fluorine	SELL
Galaxy Surfactants	HOLD
Sudarshan Chemical	BUY
Rossari Biotech	HOLD
EPL	BUY
Chemplast Sanmar	BUY
Gujarat Fluorochemicals	BUY
Tatva Chintan	BUY
Clean Science	REDUCE
PCBL	BUY