Chemical Sector Q2 Earnings Preview - Monsoon Delay, Rising Costs Challenges: Nirmal Bang
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Nirmal Bang Report
We expect the steep increase in chemical/energy prices and sustained buoyancy in freight rates to pose challenges in making Q2 FY22 estimates for the our chemical companies.
The impact could hurt margins of Coromandel International Ltd., PI Industries Ltd. and Sumitomo Chemical India Ltd. while Tata Chemicals Ltd. and UPL Ltd. will likely buck the trend.
The fundamentals look healthy, aided by good soil moisture and highwater storage levels in key reservoirs, which is good crop protection chemical/fertilizer demand.
However, a delayed monsoon and weak sowing (which has improved lately) remain cause for concern.
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