Domestic brokerage and research firm Nirmal Bang Institutional Equities is bullish on two chemical stocks following their respective Q1FY23 results – Naveen Fluorine International (NFL) and Tatva Chintan Pharma Chem and have buy and accumulated ratings on the shares respectively.
New Fluorine: Naveen Fluorine International’s 1QFY23 operating performance came in line with the brokerage’s estimates. Specialty Chemicals posted strong growth and management indicated that the new product pipeline at Specialty Chemicals remains strong.
NFIL Brokerage is made up of top stock picks in the specialty chemicals stock coverage universe, and has maintained its buy rating on Nevin Fluorine shares with an unchanged target price (TP). 4,500
“We believe that NFIL is well poised for a better future given its emphasis on product and engineering R&D, capacity building and talent management initiatives. We see very few companies aggressively pushing for technology and infrastructure development. and the same should be NFIL’s edge versus par,” the note said.
Tattva Chintan Pharma Chem: Tattva Chintan (TATVA) 1QFY23 EBITDA SDA came in at around 29% below its estimate due to higher than expected pressure in revenue and near foreign exchange losses. 50 min.
The brokerage house expects compound margins to remain at current levels for the next two years. At the same time, the risk of delay in scale-up and competitive challenges is higher in our view. The stock price performance of Tattva Chintan Pharma Chem has been flat over the past six months, despite near-term challenges like chip shortage, raw material (RM) cost inflation and poor freight outlook.
Revenue (ex-SDA) grew 60% year over year, with significant growth across all sub-segments, such as PTC, PASC and Electrolyte Salts. SDA sales were impacted by semiconductor issues, the geopolitical situation in Europe and the extended lockdown in China due to the COVID-19 outbreak.
“While we continue to remain positive on the growth potential in SDA, TATVA is also working aggressively on other areas that have a higher risk of delays in scale-up and competitive challenges, in our view. Therefore, we maintain the accumulated rating with unchanged target price (TP) 2,650,” Nirmal Bang said.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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