Despite volume growth in the export segment and strong demand in the domestic market, pricing uptick is eluding Indian agrochemical companies.
https://www.rediff.com/business/report/quality-control-orders-what-does-this-mean-for-domestic-industry/20240425.htm
The rally in the equity markets in the second half of 2023 has led to a sharp surge in the cutoff for stocks to qualify as largecaps and midcaps. On the latest list put out by the Association of Mutual Funds in India (Amfi), the smallest largecap stock now has a market capitalisation (m-cap) of Rs 67,000 crore, 35 per cent higher than in July 2023. In the case of midcaps, the cutoff has surged 26 per cent to Rs 22,000 crore.
These stocks offer the best combination of maximum 'buy' recommendations from brokerages and share price upside over the next 12 months.
The weak April-June quarter (first quarter, or Q1) results of the largest listed specialty chemical maker, SRF, and multiple global headwinds for the sector are expected to weigh on the prospects of Indian specialty chemical companies in 2023-24 (FY24). Stocks in the sector (down 7-18 per cent) have underperformed the benchmarks (up over 10 per cent) in the past three months, and given the multiple challenges, the trend is likely to continue. Kotak Institutional Equities expects a very weak quarter (Q1FY24) for the sector due to destocking, demand weakness across certain critical end-use industries, and price erosion amid intense competition from Chinese suppliers.
After being underweight on domestic agrochemical companies and preferring global plays, brokerages believe that the former may perform better in the quarters ahead. Domestic crop protection companies have faced multiple headwinds over the past year and a half, given high inventory costs, pricing pressures, lower realisations in the generic segment, increased stocks due to lower infestations, and demand-led hits to volumes. Some of the overhang from previous quarters was reflected in the April-June quarter (first quarter, or Q1) of 2023-24 (FY24) as well, with aggregate revenues and operating profit for the sector down 12 per cent and 27 per cent, respectively.
Domestic-focused agricultural chemical (agrochem) companies could face near-term headwinds, given the worries on the El Nio effect on monsoons, higher inventory, and pressure on margins. Some of these were reflected in the October-December quarter (third quarter, or Q3) results of companies and may impact them in the current quarter (fourth quarter, or Q4) as well. Nuvama Research pointed out that the sector witnessed mixed performance during the quarter as global agrochem and domestic fertiliser companies maintained growth momentum, while adverse agronomical conditions and excess channel inventory weighed on domestic market volume offtake.
The third-quarter financials didn't excite market watchers. But equity investors can still make money if they invest in the right stocks.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
PI Industries, GCPL, Colgate and HUL have delivered positive returns every year since 2008.
Portfolio returns, say analysts at Morgan Stanley, are more likely to be driven by bottom-up stock-picking rather than top-down macro forces.
Ajit Mishra, vice president, research, Religare Broking, answers your queries.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
Investors turn their attention to export-driven sectors.
What stocks will gain from a normal monsoon?
Gaurav Garg, Head of Research, CapitalVia answers readers' stock market queries.
Though the markets have lost ground since the past few sessions, analysts do not seem worried.
market rally, especially in mid-caps, has also been driven by a pick-up in the monsoon and the government's resolve to get the goods and services tax (GST) Bill cleared in the recent session of Parliament.
Ricoh India, the largest gainer among these pack, has rallied 192 per cent from Rs 294 to Rs 859 on the BSE so far in the current calendar year.
Auto stocks led the rally with Tata Motors, Hero MotoCorp and Maruti Suzuki leading the gains.
New entrants could include Flipkart, Paytm, Cafe Coffee Day and ICICI Prudential Life Insurance, it says
Markets snapped two-day losing streak and ended flat with a positive bias on Tuesday as gains in auto shares helped offset losses in IT majors.
The 30-share Sensex ended higher by 177.46 points at 28,885.21 and the Nifty gained 63.90 points at 8,778.30.
The India Meteorological Department on Tuesday said the monsoon this year is expected to be 'above normal.'
Above normal monsoon forecast and strength in Asian equities lifted sentiments.
'For investors who are willing to remain invested for two - three years, there exist quite a few good opportunities.'
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