Chemical Sector Q3 Results Preview - Healthy Revenue Growth, Margins To Support Earnings: Nirmal Bang

Nirmal Bang Report

Our agro chemical coverage stocks are likely to see modest to healthy earnings growth, aided by revenue/Ebitda growth and margin expansion, driven by an increase in product prices as well as volume.

In terms of growth in profit after tax, PI Industries Ltd. leads our coverage universe with 47.5% YoY growth followed by Tata Chemicals Ltd. with 41% YoY growth.

We estimate high single-digit profit after tax growth for Coromandel International Ltd. and Anupam Rasayan India Ltd.

Industry leader UPL Ltd. comes in last with 1% YoY dip as higher interest cost/forex loss is likely to mar healthy topline/Ebitda growth and margins. Key lead indicators such as 4.5% YoY growth in rabi crop area, moisture levels/water storage and new launches are positive for Q3 FY23/H2 FY23 prospects for crop protection chemical and nutrients.

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