By earn 
Demand Sluggishness and Margin Pressure
The second quarter of financial year 2025 (Q2 FY25) is expected to be another challenging period for India’s specialty chemicals sector. Demand remains sluggish, particularly among agrochemical end-users, leading to significant margin pressure. Companies like SRF and Aarti Industries have already faced challenges with growth guidance, emphasizing a cautious outlook for the sector.
Valuation Landscape and Key Players
In terms of valuations, various companies showcase a spectrum ranging from SRF trading at 19 times to Gujarat Fluorochemicals at a higher valuation of approximately 45.5 times. Anupam Rasayan stands at 26 times, Deepak Nitrite at 34.5 times, while Navin Fluorine trades at 35.5 times. Aarti Industries holds a valuation of 27 times, reflecting a composite picture of the specialty chemicals landscape amid ongoing pressures.
Looking Ahead: Guidance and Market Conditions
As we navigate through Q2 FY25, the market will keenly watch companies’ guidance for FY25. Aarti Industries has already revised its guidance downwards, and Kotak Securities indicates that SRF may struggle to achieve its previously set 20% growth target due to an environment dominated by challenges such as Chinese dumping and inventory destocking.
Furthermore, the export market has been largely muted, compounding the issues faced by sector players. Despite this, a low year-on-year (YoY) base may provide some relief in reported figures, but the overarching sentiment leans toward caution in the specialty chemicals sector.
