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28 September 2020 HSIE Chemical Conference
HSIE Chemical Conference
HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
We hosted a CXO-Chemical Conference-2020 and invited senior management
of seven listed chemical and agrochemical companies and an industry expert.
The nationwide lockdown impacted operations of the majority of chemical
companies in 1QFY21, but the pick-up was rapid in 2Q. Plants are currently
operating at the utilisation of 70-90% of the pre-COVID level. Plant
utilisations of companies that cater to end-user industries engaged in essential
services such as pharmaceuticals and agrochemicals are higher. Companies are
continuing with their Capex plans despite the implications of the COVID-19
pandemic, owing to a positive demand outlook. Most of the companies
believe that the Indian chemical industry is in a sweet spot given: (1) the
opportunity arising out of 'China Plus One' policy of MNCs and the
government, (2) rising domestic demand, and (3) export opportunity.
Domestic raw material availability for chemical and pharma companies will
increase as downstream oil players start producing more petrochemical
intermediates. The recently announced "Production Linked Incentive Scheme"
for domestic manufacturing of critical Key Starting Materials/Drug
Intermediates and APIs will support the growth of the chemical industry. The
Indian government has been very proactive and is planning various policies
which would act as tailwinds for the industry's long term growth. Indian
chemical companies have to invest in technology, focus on backward
integration, and collaborate amongst themselves to capitalise favourable
macro. This corroborates our stance on the Indian speciality chemical
companies (see our report link).
Aarti Industries and Alky Amines are our top picks amongst our speciality
coverage universe.
Following is the participant list:
Companies Participants Designation
Aarti Industries Mr Chetan Gandhi CFO
Alkyl Amines Mr Yogesh Kothari
Mr Kirat Patel
C&MD
ED
Balaji Amines Mr Ram Reddy MD
Bodal Chemicals Mr Ankit Patel
Mr Mayur Padhya
ED
CFO
Galaxy Surfactants Mr K Natarajan ED & COO
Meghmani Organics Mr Ankit Patel
Mr Gurjant Singh Chahal
CEO
CFO
Sharda Cropchem Mr Ramprakash Bubna C&MD
Daga Global Chemicals Mr Satyen Daga
(Industry Expert) MD
Company Reco TP Upside
(%)
Aarti Industries BUY 1,320 31.2
Alkyl Amines BUY 4,010 27.1
Balaji Amines BUY 980 20.8
Galaxy Surfactants BUY 2,070 13.7
Navin Fluorine ADD 2,210 9.4
SRF BUY 5,120 25.3
Vinati Organics SELL 890 (30.2)
Nilesh Ghuge
+91-22-6171-7342
Harshad Katkar
+91-22-6171-7319
Divya Singhal
+91-22-6171-7348
Rutvi Chokshi
+91-22-6171-7356
Page | 2
HSIE Chemical Conference
Aarti Industries (CMP: INR 1,006 , TP: INR 1,320, RECO: BUY)
Key Takeaways:
Aarti Industries is a leading Indian manufacturer of speciality chemicals and
pharmaceuticals with a global footprint. It derives 84% of its revenues from the speciality
chemicals segment and 16% from the pharmaceutical segment. Chemicals manufactured
by Aarti are used in the downstream manufacture of pharmaceuticals, agrochemicals,
polymers, additives, surfactants, pigments, dyes, etc. In terms of end-user industries, the
company derives 60% of its revenues from pharmaceutical, agrochemical and FMCG
industries and 40% from dyes, pigments, polymer additives and other industries.
Since most (60%) of the company's business caters to the pharma and agrochemical
industries which belong to the essential services category, COVID-19 pandemic only
impacted it positively. However, the remainder businesses did suffer as the discretionary
spends fell due to the pandemic. The maximum impact of the pandemic was felt during
1QFY21 after which demand picked up. Discretionary spending now has increased, and
hence the non-essential services business is recovering gradually. Blended plant utilisation
has inched up from 50% in April to 90% in September. Nitrotoluene and hydrogenation
plants are operating at 60-70% capacities currently.
The company expects a flattish growth of PAT in FY21. However, the growth trajectory of
bottom-line for the next 2-3 years maintained at 15-20% p.a.
Capex guidance for FY21 is INR 1000-1200 crores. Commissioning of plants has been
delayed due to pandemic led disruptions, but investments to be continued with the same
intensity. Chlorination plant to be commissioned in the current quarter. NCB project to be
commissioned in FY22.
For grasping the import substitution and export opportunities, the Indian chemical
industry needs to invest heavily in R&D and technology. India has the most extensive set
of a skilled young workforce, and financing is not a problem for chemical companies in
the current scenario. There exists much scope for Indian companies in the speciality
chemicals space globally.
Aarti Industries is committed to working on complex and higher value chemistries to
exploit import substitution and export penetration. The company has 4 R&D centres
operating in India. It plans to continue to cater to the current end-user industries and not
foray into newer ones.
Photochlorination project is at a drawing board stage. The company will take at least 24
months to disclose any concrete developments on the same. This is because it will take
significant time in process development and technology selection.
Agrochemicals business is doing really well globally owing to higher demand for food-
based products and stable weather conditions, unlike last year.
The pharmaceutical business consists of three sub-segments: APIs, intermediates and
xanthine derivatives. There exist 3 plants that manufacture APIs and intermediates from
which 2 are US FDA approved, and 1 is a WHO-approved GMP. The company plans to
add blocks in these plants to enhance capacity by 25% in the near term. Pharma business
to grow at 20%. The company is optimistic above its pharmaceuticals business and expects
it to clock in 18-22% EBITDA margins in the longer term.
Europe region's business is stable as of now.
Mr C. Gogri, promoter, has been selling some of his stake recently to honour his
philanthropic commitments.
Page | 3
HSIE Chemical Conference
Alkyl Amines (CMP: INR 3,155, TP: INR 4,010 , RECO: BUY)
Key Takeaways:
The beneficiary of the Atmanirbhar Bharat scheme: Domestic raw material availability
for chemical and pharma companies will increase as downstream oil players start
producing more petrochemical intermediates. Cheaper raw materials will lead to higher
production by local pharma players, in turn, resulting in an increased requirement for
amines. This will help to expand to newer products as well as raise sales of existing
products for Alkyl Amines.
Production-linked scheme for chemical companies: The scheme, which is soon to be
announced, will reward the chemical industry in terms of lower duties, raw material
prices if companies meet the specified investment targets. This will result in a massive
advantage for the domestic manufacturing industry in terms of cheaper raw material
sourcing and sales growth.
Anticipated sales growth: The management expects sales growth to be north of 10-15%
YoY for next 2-3 years going by the historic trend coupled with Government policies such
as Make in India that should push the pharma sector, in turn benefiting AACL.
Acetonitrile:
1. Prices: Despite Chinese players having resumed production, prices for Acetonitrile
remain elevated (current per kg price is between USD 3.5-4 or INR 250-300). Hence,
the management expects the current prices to continue at least for at least a few
quarters.
2. Global and domestic market size: The global market stands at about 150K tons,
whereas the domestic market size for the product is at 20-25K tons. Currently,
domestic demand is mostly met by imports.
3. Domestic market share: Primary players in the domestic market are Deepak Nitrile,
Balaji Amines and Alkyl Amines (40% market share).
4. Capacity expansion: The additional capacity of 18K tons should come onstream by
1HFY22, taking the total capacity to 26-30ktpa at the company level.
DMA-HCL: The drug finds application in treating diabetes. The company is witnessing a
growth of 15-20% YoY and anticipates to add two additional plants over the next 2 years
to meet this demand.
Methyl Amines: The expansion is on track, and the additional capacity should on stream
by Dec-20.
Page | 4
HSIE Chemical Conference
Balaji Amines (CMP: INR 811, TP: INR 980, RECO: BUY)
Key Takeaways:
▪ Atmanirbhar Bharat: 300+ chemicals have been identified where benefits will be
announced if investments made are made by way of greenfield expansion. Balaji would be
a beneficiary of this policy for their greenfield expansion at Solapur. Phase II of this
expansion will start soon to avail the benefits of the Atmanirbhar Bharat scheme.
▪ Impact of the COVID-19: The pandemic has taught an important lesson to countries,
wherein they should be self-sufficient in terms of manufacturing to expect good growth.
The coronavirus disease has created many opportunities in the pharma space; for instance,
Ethyl amines finds application in the COVID-19 vaccine.
▪ Balaji Specialty Chemicals (BSCL): (1) Balaji's subsidiary (stake: 55%) is engaged in the
manufacture of Ethylenediamine (EDA), Piperazine (PIP), Diethylenetriamine (DETA),
among other speciality chemicals. Imports meet the current domestic demand for these
products. India currently imports 29ktpa of EDA and Balaji's capacity would be 20-22ktpa.
India presently imports 7-8ktpa of PIP whereas Balaji would have a capacity of 6-7ktpa.
The company's capacity for DETA would equal India's imports of 3ktpa.
▪ Tax benefits for BSCL and greenfield expansion: 50% GST refund and concession of INR
1 per unit on the power bill.
▪ Capacity utilisation: Balaji's production level has recovered to pre-pandemic levels with
Ethyl amines having surpassed those levels. Utilisation levels for Specialty chemicals,
however, continue to be low at 30% at present but should recover to 40% from Q3
onwards. DMF prices have improved, courtesy the Anti-Dumping duty, which has further
boosted utilisation levels.
▪ Acetonitrile: Expanded capacity to reach 9ktpa by Nov-20. Demand for the product
remains elevated as it is a preferred solvent by end-user companies.
▪ The hotel business: BAL paid INR 0.5-0.6mn as fixed costs for August in the absence of
sufficient revenue. 20-30% of the hotel is operational now. This level should rise to >60%
once the trains start functioning.
▪ Margin guidance: The management is confident of sustaining an EBITDA margin
between 18-20% given the current robust demand.
Page | 5
HSIE Chemical Conference
Bodal Chemicals (CMP: INR 68, NOT RATED)
Key takeaways:
▪ Bodal Chemicals is a fully-integrated manufacturer of dyestuff and dye intermediates and
is a global leader in these products. Its segmental mix consists of: (1) Dye intermediates
(41% of total revenue, 33,000 mtpa installed capacity with 82% utilisation and 25
products), (2) Dyestuff (39% of total revenue, 35,000 mtpa, 54% utilisation and 175
products), and (3) Sulphur and bulk chemicals (11% of total revenue, 2,26,000 mtpa, 88%
utilisation and 12 products). The main raw materials used by the company are aniline,
sulphur, PNCB, caustic soda and chlorine. It caters to the textile, leather, paper and water
treatment industries. It holds a 3%/13% global/domestic market share in dyestuff and a
6%/20% global/domestic market share in dye intermediates. Exports form 41% of the top-
line.
▪ Key growth drivers: (1) Dyestuff (powder) capacity was increased by 18000 mtpa in the
last 2 years, (2) Spike in production of liquid dyes owing to a robust demand from paper
and packaging industries, (3) Strategic investments in subsidiaries, (4) TCCA with strong
demand from the US will now be produced at the newly established Trion chemical plant,
(5) Increased focus on speciality chemicals, and (6) Expansions in margins due to the
increasing share of B2C in dyestuff across the world.
▪ May and June were difficult times for the business, given the COVID-19 crisis. Growth
picked up from July, and from August onwards operations were back on track. Demand
has improved from August, and product prices have surged. Currently, the company is
operating at ~75-80% utilisation level.
▪ Smaller players will remain in business, but will not be competitive and will witness flat
growth. Those who consolidate and integrate will command better margins and growth.
Bodal to focus on backward integration and branding in the dyestuff business locally to
gain market share.
▪ The vinyl sulphur plant (6000 TPA) is ready, but due to the low demand courtesy COVID-
19 pandemic, Bodal will wait for the demand to increase and then start its operations, not
taking a hit on the prices. The plant is expected to be commissioned by Dec'20.
▪ The trion chloride plant's commissioning was delayed earlier due to technical issues,
which now is operational with a current capacity of ~500 tons per month. The US is the
biggest market for this product. The revenue potential of this project is INR 60-100 crores
p.a. Owing to benign raw material prices, margins to remain elevated in the short term,
eventually stabilising to ~15-20%.
▪ Bodal is studying organic chemical chains to expand its business further and has
earmarked INR 300-500 crores for the same.
▪ Bodal acquired 80% stake in a Turkish entity named Sener Boya in Aug 2019. Sener Boya
has been operating since the past 20 years and covers most of the Turkish market. It has
currently achieved a production level of ~250 mt per month which this shall rise to ~300-
350 mt per month in 3-4 months' time period. There exists high demand from
neighbouring countries too.
▪ The working capital blockage has reduced by INR 50 crores during the last 4-5 months as
the company has gotten collections regularly despite the nationwide lockdown. Working
capital will further improve as prices are increasing and volumes are rising. Working
capital will reach the pre-COVID level in the next 3-4 months.
Page | 6
HSIE Chemical Conference
Galaxy Surfactants (CMP: INR 1,821 , TP: INR 2,070 , RECO: BUY)
Key Takeaways:
Healthy demand for performance surfactants: Given the high emphasis on hygiene
factors, consumer behaviour has changed for the long haul. The 8% YoY jump in
performance surfactants is testament to this fact. The lockdown had impacted operations
in 1QFY21; however, the pick-up was rapid in the last 50 days on the quarter. 2Q has
been less challenging, and the company has been running with 70-75% employee
strength. Demand was never adversely impacted and continues to be robust. Inventory
levels are healthy and rural demand is recovering as well. The growth seems sustainable.
Strategies employed to overcome the supply-side challenges: Production runs have
been rejigged depending on availability of people and demand. Customer demand is
assessed on a weekly basis, given the lack of more extended time clarity because of the
pandemic. The volatility of demand is being managed efficiently by higher vendor and
customer engagement. The company is constantly looking for stimulus to manage
operations efficiently.
Speciality care products: A restriction on free-movement in most countries has resulted
in low demand for speciality care products since these products find application
primarily in personal care formulations. Big MNC players have indicated the adverse
impact on beauty care because of work from home and travel restrictions. As these
restrictions ease, demand will pick up. Online channels, however, continue to see good
demand because of ease of delivery.
Demand intact in the AMET market: As these countries managed the pandemic well
and had no lockdowns, the company's Egypt plant remained fully functional. The low
base also helps show impressive growth in this market.
Raw material availability has not been a challenge: The company is well-positioned to
have a regular supply of materials, courtesy its strategic vendor partnerships. As 50-60%
of the company's raw material is imported, the team has had to stay vigilant to manage
the timely delivery of materials.
Capex guidance: INR 20bn is planned to be incurred over the next 3 years in total.
Capacity availability is key for the company to meet any additional demand. It becomes
important to expand capacity to beat the competition. MNCs in the Home and Personal
Care (HPC) space are highly dependent on China for raw material sourcing, and it is
difficult for India to match China's scale, but Galaxy wants to be prepared for any such
disruptions.
Competition: While global surfactant manufacturers produce a diverse range of
products, Galaxy focuses only on the HPC category. Companies with whom Galaxy's
product categories overlap are- BASF (global presence), Stepan (the US comprises 75%
revenue mix), Clariant (prominent player in Asia and Europe) and Godrej and Aarti
Surfactants in India.
Customer mix: Tier 1 and Tier 2 customers were the fastest to bounce back after the
pandemic hit. Tier 3 customers were the most impacted because of lower ability to
manage working capital cycles, but demand by most of these players stabilised by July.
Of the T3 customers, companies with an online presence were comparatively insulated.
Page | 7
HSIE Chemical Conference
Meghmani Organics (CMP: INR 78 , NOT RATED)
Key Takeaways:
Meghmani Organics Limited is an India-based manufacturer of pigment and pesticide
products. Its vision is to become one of the leading diversified chemical companies in
"Organic Chemistry" globally. The company’s segments are: (1) Pigments (29% of total
revenues), (2) Agrochemicals (44%), and (3) Chlor Alkali & its derivatives (27%).
Meghmani is amongst the top 3 global phthalocyanine-based pigment players and holds
a 14% global market share.
The pigment/agrochemical/chlor alkali segment has a 15/18/30% EBITDA margin.
Blended EBITDA margin of the business is in the range of 21-23%, and the company aims
to sustain the same and keep it above industry standards.
Currently, the company is operating at 80% of its capacity. It plans to maintain its debt-
equity ratio at 0.6x and networking capital cycle at 90-100 days.
Asset turnover ratio in the pigment/agrochemical/chlor alkali segment is 3/3/1x. With the
addition of value-added products in the chlor alkali segment, the asset turnover to
increase to 2x in the near term.
Meghmani's long term plan for the agrochemical segment is to achieve a top-line of INR
2,000 crores by FY23. To do so, it plans to incur the following Capex:
Project Capex (INR Cr) Expected date of
completion
Expected revenue generation
(INR Cr)
2.4 D (Capacity-10k TPA) 127 3QFY21 200
Formulation Plant 25 3QFY21 150
Multi-Purpose Plant (New molecules) 310 4QFY22 600
Total 462
950
Meghmani's long term plan for the chlor alkali & its derivatives segment is to achieve a
top-line of INR 2,000 crores by FY23. This will be achieved as benefits start accruing from
the recently completed projects and committing to new investments listed below:
Project Capacity Date of
commissioning
Expected revenue generation
(INR Cr)
Epichlorohydrin 50k TPA 4QFY22 475
CPVC Resin 30k TPA 3QFY23 300
The company currently makes blue and green pigments that cater to printing ink, plastic
and paints industries. Printing ink is losing its relevance, given the shift to digital media
and the paints industry's demand is minimal. There exist great opportunities post
COVID-19 pandemic in the packaging ink, and plastics industries and the company
would like to shift its focus on catering their demand. Hence, rather than expanding
capacities of the current pigments, the company wants to foray into newer pigments that
will add value and volumes.
The company plans on funding its Capex via its internal funds and borrowing debt as the
cost of debt has reduced. No plans to raise equity in the near future.
The company plans to focus highly on backward integration.
Meghmani Organics Ltd plans to demerge its subsidiary- Meghmani Finechem Ltd
which holds the chlor alkali and its derivatives business. The company has received the
approval for the same from SEBI, and this restructuring is expected to be completed by
1QFY22. Demerged company too shall be listed on the stock exchanges.
Page | 8
HSIE Chemical Conference
Sharda Cropchem (CMP: INR 257 , NOT RATED)
Key Takeaways:
▪ About the company: Sharda Cropchem is a fast-growing global agrochemicals company
with a leadership position in the generic crop protection chemicals industry. It has made
deep inroads in the highly developed European and US markets which are characterised
as high entry barrier markets. It also has a significant presence in other regulated markets
such as LATAM and Rest of the World. The company's core competence lies in
developing product dossiers and seeking product registrations in different countries. The
company not only has an extensive distribution network of third-party distributors but
has also set up its own sales force in various countries in Europe and Mexico, Colombia,
South Africa and India. Its product portfolio in agrochemical business comprises of
formulations and generic active ingredients in fungicide, herbicide and insecticide
segments for protecting a different kind of crops as well as serves turf and speciality
markets and in biocide segment as disinfectants thereby allowing it to offer a varied range
of formulations and generic active ingredients. The product portfolio in non-agrochemical
business comprises of belts, general chemicals, dyes and dye intermediates.
▪ No impact of the lockdown on the company's performance: The company is dependent
on China for its raw material sourcing. Since the Chinese factories resumed production in
Feb-20, Sharda Cropchem's performance has remained stable despite the country-wide
lockdown in India.
▪ Impact of the US-China trade war: The company is facing challenges as a result of the
trade tensions between China and the US, but the European and other markets are
unaffected. American importers have to pay higher for goods, and they pass it on to
farmers. Farmers, however, are unable to pass it on to their customers. This has resulted in
high alertness among distributors and retailers to keep higher inventories.
▪ Weather conditions in European markets: Dry weather pattern in some European
countries has reduced the demand for agrochemicals. This would have a 10-15% impact
on Sharda Chemicals' top-line.
▪ 10-15% revenue growth expected: The management is confident that the revenue will be
able to grow at a CAGR of 10-15% over the next 3 years, led by an increasing number of
registrations.
▪ Seasonality of business: 1H of the calendar year is seasonally stronger for Sharda
Cropchem, Jan-Mar quarter being the best, followed by the Apr-June quarter. Agricultural
activities slow with the onset of winter, so the company's business is the weakest in Sept-
Dec quarter.
▪ Registrations: The number of registrations mainly drives the company's business. COVID
hasn't impacted the registration space at all. In March 2020, the company had 1230
registrations in EU, 210 in NAFTA, 748 in LATNAM and 235 in RoW. In June 2020, gross
registrations reached 2440 as compared to 2418 in March. The company expects to grow
continuously and increase registrations going forward.
Page | 9
HSIE Chemical Conference
Global Daga Chemicals (UNLISTED , NOT RATED)
Key Takeaways:
▪ Daga Global Chemicals Pvt. Ltd. (DGCPL), established in 1985, is a rapidly growing
chemicals supply and distribution company, widely networked in India since 1985, with
overseas sourcing and marketing arm at Shanghai, China. Its products are bulk and fine
chemicals, solvents, intermediates, agro and pharmaceutical raw materials, polymers, etc.
It mainly caters to the chemical, pharmaceutical, agrochemical, paints & pigments and
polymer industries.
▪ China works because of the government, and India works despite the government.
China's government has been proactive for years, and this is one of the key reasons for the
Chinese chemical industry's phenomenal growth and success. Post the outbreak of
COVID-19, China has already implemented a 15-point agenda for supporting its chemical
industry throughout the value chain. Currently, Chinese chemical companies' monthly
business is growing on year on year basis.
▪ India's chemical industry is in a sweet spot, given the import substitution opportunity and
export opportunity. Due to the ongoing trade tensions with China post-COVID-19, a lot of
demand is seen to be shifting to India, especially from the US, Europe and Japan. In order
to exploit this opportunity, Indian companies need to invest heavily in improving their
technology, focus on backward integration, collaborate amongst themselves and help and
grow MSMEs & SMEs.
▪ Indian chemical industry needs to stick together, and big chemical companies should try
to source their raw materials locally from MSMEs/SMEs rather than importing the same
from China. Oil majors expanding their capacities in India along with foraying into the
petrochemicals space will solidify feedstock availability making raw material costs lower
for the industry. Key starting materials (KSM) are currently being sourced from Europe
and China. These need to be developed in India using advanced technology to make India
more competitive globally.
▪ India, in terms of pollution control, is way ahead of China, although there exists an
enormous scope of improvement in HSE compliance. Companies need to give priority to
the same.
▪ Basic chemicals, when processed using complex technology, yield speciality chemicals.
Speciality chemicals is one of the best areas to venture in for Indian chemical companies.
▪ Aarti, SRF, PI and Vinati Organics are investing heavily in building their R&D
capabilities. India needs many more such companies to expand the industry and take a
more significant share of the global pie. In terms of growth prospects, SRF, Vinati
Organics, Atul, Alkyl Amies and Paushak seem to be very well placed.
▪ Significant investments are expected in South India by pharmaceutical companies, and in
North and West India by agrochemical companies.
▪ The Indian government has been very proactive in the past 4-5 months and is planning to
come up with various policies that will help the chemical industry to clock in exponential
growth in the future. The government also needs to focus on increasing the ease of doing
business in India to attract foreign investments.
Page | 10
HSIE Chemical Conference
Financials INR mn
Company
Revenue EBITDA APAT Adj. EPS (INR)
FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E
Aarti Industries 41,863 43,560 48,285 9,773 8,297 10,092 5,361 3,835 4,800 30.8 22.0 27.5
Alkyl Amines 9,929 10,825 12,743 2,590 2,880 3,571 1,798 1,992 2,492 88.2 97.7 122.2
Balaji Amines 9,358 10,481 12,168 1,807 2,055 2,606 975 1,187 1,566 30.1 36.6 48.3
Galaxy Surfactants 25,964 27,424 34,094 3,689 3,921 4,752 2,244 2,231 2,815 65.0 62.9 79.4
INR mn
Company
Revenue EBITDA APAT Adj. EPS (INR)
FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20
Bodal Chemicals 11,422 14,235 13,748 1,944 2,361 1,377 1,226 1,432 877 10.0 11.7 7.2
Meghmani Organics 18,033 20,880 21,912 4,312 5,445 4,341 1,713 2,513 2,401 6.7 9.9 9.4
Sharda Cropchem 17,066 19,976 20,030 3,454 3,266 2,970 1,908 1,763 1,647 21.1 19.5 18.3
Valuation Summary
Company
MCap
(INR
bn)
CMP
(INR) RECO
TP
(INR)
Adj. EPS (INR/sh) P/E (x) ROE (%)
FY20 FY21E FY22E FY20 FY21E FY22E FY20 FY21E FY22E
Aarti
Industries 175.29 1,006 BUY 1,320 30.8 22.0 27.5 32.7 45.7 36.5 19.1 12.2 13.5
Alkyl Amines 64.40 3,155 BUY 4,010 88.2 97.7 122.2 35.8 32.3 25.8 47.8 31.9 30.2
Balaji Amines 26.28 811 BUY 980 30.1 36.6 48.3 27.0 22.1 16.8 14.6 15.1 16.7
Galaxy
Surfactants 64.55 1,821 BUY 2,070 65.0 62.9 79.4 28.0 28.9 22.9 23.1 19.7 21.9
Navin
Fluorine
International
99.67 2,020 ADD 2,210 77.9 40.3 59.9 25.9 50.2 33.7 31.0 13.4 17.7
SRF 234.88 4,086 BUY 5,120 174.2 103.4 126.6 23.5 39.5 32.3 22.1 11.4 12.6
Vinati
Organics 131.05 1,275 SELL 890 32.5 28.9 32.1 39.3 44.2 39.7 28.6 22.0 21.7
Page | 11
HSIE Chemical Conference
Rating Criteria
BUY: >+15% return potential
ADD: +5% to +15% return potential
REDUCE: -10% to +5% return potential
SELL: > 10% Downside return potential
Disclosure:
We, Nilesh Ghuge, MMS, Harshad Katkar, MBA, Divya Singhal, CA & Rutvi Chokshi, CA authors and the names subscribed to this report, hereby certify
that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse
disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related
to the specific recommendation(s) or view(s) in this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative
or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding
the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material
conflict of interest.
Any holding in stock –No
HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.
Disclaimer:
This report has been prepared by HDFC Securities Ltd and is solely for information of the recipient only. The report must not be used as a singular basis of any
investment decision. The views herein are of a general nature and do not consider the risk appetite or the particular circumstances of an individual investor;
readers are requested to take professional advice before investing. Nothing in this document should be construed as investment advice. Each recipient of this
document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in securities of the companies
referred to in this document (including merits and risks) and should consult their own advisors to determine merits and risks of such investment. The
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