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00:00We have with us today Rohan Gupta, Director at Nuwama Institutional Equities, who is joining
00:04us now.
00:05Welcome to the show, sir.
00:07My first question to you is that, you know, you've spoken to a lot of the agrochem players
00:13and they've confirmed that they're seeing some kind of revival in their overall business.
00:17But you know, and this is after a tepid FY24.
00:23So but overall, I want to know what are your views on the same.
00:26Do you expect revival in the business in FY25?
00:29Yeah.
00:30Hi, good morning and sure, we are also looking at a strong recovery in a domestic agrochemicals
00:37market.
00:38There are not much inventories in the system.
00:41And what we are also expecting that the chemical prices have slightly started going up.
00:48So that is also likely to have some benefit for the players in a formulation because when
00:53the prices go up, they tend to benefit in a rising price scenario.
00:58Demand environment is likely to remain solid as far as the domestic formation companies
01:01are concerned, because so far now, the expectation of monsoon has been above normal or close
01:07to normal, as was predicted by the most of the outside agencies like IMD and Skymed.
01:15Agri-commodity prices, even yesterday only government came with the Kharif crop MSPs,
01:21which are roughly 5 to 6% up on a yy basis, which is broadly in line with the inflationary
01:27pressure which is there.
01:28So I think that for the farmer's point of view, that is a quite positive scenario right
01:35now.
01:36If the good monsoon and the agri-commodity prices, farmers are likely to spend more money
01:42on agrochemicals and agri-input, that's where our companies in a domestic formation should
01:47benefit.
01:48Right.
01:49Mr. Gupta, talk to us about the rural play, right?
01:54There's plenty being spoken about on FMCG being the big beneficiary, if rural revival
02:01kicks in, but talk to us about some of these other chemical plays, which behave as raw
02:09material manufacturers to these larger FMCG players, something like a galaxy surfactants.
02:16Do you believe that a turnaround in that sector is very well warranted?
02:21What are you expecting in terms of some of the good plays in that sector?
02:26And do you also believe that demand there is starting to pick up?
02:33Are you expecting some order wins over there in a big way?
02:38What are those factors that you would look for?
02:41So yes, as far as that specialty chemical sector, which is catering to primarily end-user
02:48industries like FMCG, cosmetics or daily consumption kind of sector, yes, rural recovery is likely
02:57to have a positive impact on that.
02:59But yes, even last year also, global domestic market, I mean India for the players like
03:04Galaxy and all, was roughly 8% to 9% kind of growth in terms of volume.
03:10I think that even this year also, the growth should remain firm, also contributed by rural
03:17as what most of the FMCG MNCs are guiding that they are expecting and they are witnessing
03:24actually a rural recovery.
03:27So that will be definitely a positive scenario for the manufacturers of specialty chemicals,
03:33which are primarily catering to these segments and end-user industry, Galaxy, Fyne, Rosari,
03:41some of these companies are catering to them and should be the beneficiary of that.
03:46Got it.
03:47Mr. Gupta, quickly, your topics in the sector.
03:51So we are still very much positive on the specialty chemicals and we expect that the
03:55recovery on Q-on-Q basis or sequential recovery is already set.
04:00In near term, I think that domestic agrochemicals manufacturer, intermediate manufacturer which
04:06have been impacted last year, they should be benefiting, formulation, branded guys should
04:10be benefiting.
04:11So that's where in domestic agriculture, Dhanuka kind of players or even some of the agrochemical
04:18intermediate manufacturers like India Pesticide, Insecticide India, Bharat Rasayan, these are
04:24the companies will be the bigger beneficiary.
04:26In specialty chemicals, we are liking Gujarat Floro kind of players who are in Floropolymers,
04:32we are liking Aarti Industries, Galaxy Surfactants, these are the players we are liking.
04:37Right.
04:38Okay.
04:39Well, thank you so much for taking our time and speaking with us at NETV Profit.