"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.
Prabhudas Lilladher's research report on Indraprastha Gas
We tweak our FY23/24E earnings lower by ~1%. IGL reported strong results with EBIDTA/PAT of Rs5.0bn (6%Q/Q; PLe Rs3.9bn) and Rs3.6bn (16%Q/Q; PLe Rs2.7bn), due to higher margins given lower spot purchase. Volumes were lower QoQ partly due to pandemic restrictions in January and were at 7.7mscmd (-1%Q/Q). For FY22, EBIDTA/PAT was at Rs18.8bn (+11% 2yr CAGR) and Rs13.1bn (2yr CAGR 7.7%). We believe pick-up in economic activity will drive growth in coming quarters. IGL remains an enviable business model with high volume growth due to geographical expansion and addition of new buses and taxis. Also, fuel economics, shift to private vehicle ownership post pandemic will drive CNG volumes despite excise duty cuts, in our view.
Outlook
Reiterate “BUY” with DCF-based PT of Rs589 (Rs662) as we raise the WACC to 10.3% from 9.7%.
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