EBITDA to grow 1.1% YoY (5.1% QoQ), however, excluding Chemplast, 15.9% YoY - 1) SRF’s EBITDA to dip (-7.3%) YoY on lower margin in non-chemicals, while chemicals business to continue its good show; 2) Navin Fluorine (+64%) to benefit from rise in utilisation of HPP plant and higher CRAMS revenue; 3) Gujarat Fluorochemicals’ (57% YoY) growth is likely on a strong show in new fluoropolymers and ref-gas; QoQ dip is from seasonality, and 4) Clean Science’s (44% YoY), Rossari (+37%), and EPL’s (+13.7%) EBITDA growth to benefit from lower input prices.

Tatva Chintan’s performance continues to hurt from muted SDA sales (albeit part recovery QoQ). Galaxy Surfactants’ volumes may be muted on weakness in AMET, but EBITDA/kg may be healthy. Chemplast’s volumes to rise YoY on re-inventorisation, but PVC spread is likely to be weak (on high cost inventory) which implies steep drop in EBITDA YoY. PCBL’s volumes and gross profit/kg to moderate. Sudarshan is likely to continue facing volume pressure in pigment business from lower demand from plastics.

SRF’s chemical business EBIT to grow 26% YoY / 2.2% QoQ to Rs5.3bn. SRF’s chemical business EBIT may gain from steady growth (YoY) in fluoro-specialty, and sustained high price in ref-gas (HFC). Technical textiles and packaging films’ EBIT is likely to be lower YoY on dip in spreads; however, we anticipate some recovery QoQ (on lower inventory losses). SRF’s revenue to grow 7% YoY / down 3.7% QoQ to Rs36bn, EBITDA to decline 7.3% YoY / up 6.3% QoQ to Rs8.2bn. Net profit to be flattish YoY / up 5% QoQ to Rs5.1bn.

Navin Fluorine’s EBITDA to rise 64% YoY to Rs1.6bn. Revenue to grow 55% YoY to Rs5.7bn. This would be aided by 84% YoY growth in HPP (which also includes ref-gas and inorganic fluoride) on commissioning of intermediate product for Honeywell. Specialty chemicals and CRAMS revenue to grow 20% and 70% YoY, respectively. EBITDA margin may rise 380bps QoQ on better mix, and operating leverage. EBITDA / PAT may grow 64% / 66% YoY to Rs1.6bn / Rs1.1bn, respectively.

Gujarat Fluorochemicals’ EBITDA may rise 57% YoY / down 6.5% QoQ to Rs5bn. Caustic soda and chloromethane revenues are likely to dip YoY, while ref-gas revenue YoY to benefit from R-125 volumes. PTFE to benefit from higher realisation while new fluoropolymers may benefit from higher capacity utilisation in FKM and PVDF on increased availability of R-142B. Gross profit margin may dip 50bps QoQ to 72.3%. Net profit may rise 62% YoY / down 8.1% QoQ to Rs3.3bn.

Clean Science’s net profit to grow 39.5% YoY / 19% QoQ to Rs809mn. We expect Clean Science’s revenue to grow across segments YoY partly driven by price increases. Gross profit margin is expected to jump 100bps QoQ to 63.5% aided by drop in key raw material prices. Company’s EBITDA is likely to jump 44% YoY / 12.6% QoQ to Rs1.1bn, and EBITDA margin to be 41.1% (up 180bps QoQ).

Tatva Chintan’s EBITDA to dip 25% YoY / +60% QoQ to Rs179mn. Revenue from SDA to recover QoQ but it is down 63% YoY on slowdown in auto, and de-inventorisation by customers. PTC, electronic chemicals and PASC to grow at a healthy pace, but fail to offset SDA revenue decline. The company has guided for recovery in SDA Q4FY23E onwards, and commentary on the segment will be critical for our FY24 EPS estimate. 

Galaxy Surfactants’ volumes to grow 1.8% YoY to 59kte on stress in AMET. India should see steady volume performance; RoW can see some softness. This may drive performance surfactants volumes to rise 4% YoY; specialty care volumes to dip 2%. The realisation may dip on drop in raw-material prices. Thus, revenue to dip 12% QoQ, but grow 17% YoY to Rs11bn. Gross profit margin to improve 350bps QoQ (optically on lower raw material cost), while EBITDA margin may rise 130bps. EBITDA /kg to remain healthy at Rs22.1 (flattish QoQ). Net profit to grow 82% YoY / down 1.1% QoQ to Rs829mn.

Rossari’s net profit to grow 36% YoY / 28% QoQ to Rs306mn. Rossari’s consolidated revenue is expected to grow 4% YoY / 4.8% QoQ to Rs4.5bn which is aided by 5% YoY growth in HPPC. Textile business is likely to have muted revenue due to headwind for the industry. EBITDA should grow 37% YoY to Rs641mn which should benefit from decline in raw material prices and EBITDA margin may improve by 1100bps QoQ to 14.4%.

EPL’s EBITDA to rise 13.7% YoY to Rs1.6bn. Revenue is likely to grow 8.2% YoY to Rs9.6bn. Revenue growth to come across geographies except EAP (down 10% YoY hurt from lockdown) -  AMESA (+10% YoY), Americas (+20%) and Europe (+20%). Gross profit may be up 7.2% YoY to Rs5.2bn and EBITDA to grow 13.7% YoY to Rs1.6bn (operating leverage and lower freight cost). Net profit to grow lower 2.8% YoY to Rs587mn on higher effective tax rate. We expect EBIT margin improvement sequentially across segments except in EAP.

Sudarshan Chemical’s EBITDA to drop 3.1% YoY / up 67% QoQ. Revenue is expected to dip 0.5% YoY / +13.3% QoQ to Rs6bn. Gross profit margin may improve 80bps QoQ to 39.5% on easing raw material inflation and EBITDA margin may improve by 384bps to 12%. We expect net profit to dip 29% YoY to Rs258mn.

Chemplast Sanmar’s EBITDA to dip 79% YoY to Rs759mn. Volumes are likely to be healthy, up 20.5% YoY, on re-inventorisation, to 143kte. Revenue is estimated to dip 18.6% YoY to Rs11.8bn on lower realisation. PVC spread is expected to shrink due to high cost VCM inventory and benefit of PVC price increase has only come at end-Q3FY23, thus, spreads are expected to normalise in Q4FY23E. Specialty revenue growth is impacted by lower realisation in paste-PVC. Caustic soda / chloromethane price drop will add to pain in Q3FY23. Gross profit may be lower by 40% YoY to Rs3.7bn. Higher power cost may eat into EBITDA growth. Net profit should contract 94% YoY to Rs144mn.

PCBL’s EBITDA to rise 3% YoY / down 8.2% QoQ to Rs1.7bn. Volumes to dip 5% YoY to 111kte on some slowdown in exports demand while domestic demand is steady. Realisation to be lower QoQ on drop in input cost and some contraction in spreads. Gross profit/kg to improve 17.3% YoY (down 2% QoQ on tepid exports demand) to Rs31.8 on higher spreads in exports market, rise in specialty mix and higher realisation for power (by-product). Net profit to dip 6.3% YoY to Rs1bn.