Top Stock Picks: Specialty Chemical Stocks To Buy, Sell, Hold & Reduce As Per ICICI-Sec

From the specialty chemical space, the brokerage firm ICICI Securities has placed a buy call on the shares of Gujarat Fluorochem for a target price of Rs 3,356, Chemplast Sanmar (Target price: Rs 910), EPL (Target price: Rs 260), Sudarshan Chemical (Target price: Rs 683), Tatva Chintan Pharma Chem (Target price: Rs 3,000), Phillips Carbon Black (PCBL) with a target price of Rs 147.

SRF (target price: Rs2,141) and Clean Science & Technology (target price: Rs2,110) have also received "Reduce" ratings from the brokerage firm. ICICI Securities has Navin Fluorine rated "Sell" with a target price of Rs 3,550 and Galaxy Surfactants rated "Hold" with a target price of Rs 2,710 and Rossari Biotech rated "Hold" with a target price of Rs 1,047.

The brokerage has said in a note that "We estimate our chemical coverage universe revenues to grow 34% YoY (9% QoQ) in Q4FY22 on sharp rise in prices due to input cost inflation. However, we expect gross profit to grow 24% YoY (+5.8% QoQ), which indicates strong underlying trend led by: 1) SRF's robust growth (37% YoY) on pricing benefit in ref-gas, 2) Gujarat Fluorochemicals (35.5% YoY) on turnaround in fluoropolymers, and 3) Navin Fluorine (34% YoY) on spillover of CRAMS revenue from Q3FY22. We expect Rossari (+64% YoY) to reflect benefit from acquisitions."

ICICI Securities has claimed that "Tatva Chintan's performance hurt from slowdown in auto (lower SDA sales) while Clean Science has gained from price hikes across products. Galaxy Surfactants volumes may remain muted, but EBITDA normalise to Rs16/kg. Chemplast's volumes will be healthy, but PVC spread contraction and high-cost inventory caused pain. PCBL's gross profit/kg is expected to improve on the back of better India sales, but higher operating cost may impact EBITDA. EPL and Sudarshan are likely to face cost headwinds. Gujarat Fluorochemicals is our top pick in the sector."

Top Specialty Chemical Stocks To Watch Now As Per ICICI Securities

1. SRF (REDUCE, target price: Rs2,141)
2. Navin Fluorine (SELL, target price: Rs3,550)
3. Gujarat Fluorochemicals (BUY, target price: Rs3,356)
4. Clean Science & Technology (REDUCE, target price: Rs2,110)
5. Tatva Chintan Pharma Chem (BUY, target price: Rs3,000)
6. Galaxy Surfactants (HOLD, target price: Rs2,710)
7. Rossari Biotech (HOLD, target price: Rs1,047)
8. EPL (BUY, target price: Rs260)
9. Sudarshan Chemical (BUY, target price: Rs683)
10. Chemplast Sanmar (BUY, target price: Rs910)
11. PCBL (BUY, target price: Rs147)