Mumbai: Share price dynamics along with hopes of an exponential rise in local as well as global demand from civic bodies and other companies have boosted stocks of India’s speciality chemicals manufacturers.
“There are expectations that India will play a major role in exporting bulk and speciality chemicals to the global markets and this has led to a healthy rise in the stock prices of companies from this sector,” Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services, told IANS.
“Another key reason for the upward movement has been the opening up of plants by these companies to cater to the demand for speciality chemicals which are being used by the municipal bodies to sanitise public areas.”
Prior to the Covid-19 outbreak, China used to be the dominant player in exports of bulk specialty chemicals, but investors believe that India can soon grab a major chunk of that export market.
Besides, municipal agencies across the country are using various speciality chemicals to sanitise public places to curb the spread of Covid-19 infections. Some companies have taken this as an oportunity and started their plants to fulfill the deman from this categoy.
At present, the national lockdown which has been deemed necessary to curb the spread of Covid-19, has dealt a heavy blow to commerce, leading to a temporary closure of shopping malls, dine-in restaurants, grounding of aircraft, shutting down of factories and deserted market places.
Furthermore, market observers contend that attractive valuations have also led to the upward movement of these stocks.
“The share prices have bounced back after bottoming out on March 24. This is primarily due to the fact that these shares were in an oversold position,” Deepak Jasani, Research Head, HDFC Securities, told IANS.
“However, the main industries that these companies provide raw materials to are the aluminium, textiles and paper industries which are currently impacted due to the lockdown.”
In terms of prices, Gujarat Alkalies & Chemicals stocks at the BSE on Wednesday rose by Rs 1.85 or 0.60 per cent to Rs 311.15 from its previous close of Rs 309.30. Another major, Tata Chemicals’ stocks at the BSE rose to Rs 240.20, up Rs 2.80 or 1.18 per cent from its previous close of Rs 237.40 per share.
The stocks of speciality care products maker Galaxy Surfactants rose to Rs 1,292.60, up by Rs 21.30 or 1.68 per cent from its previous close.
Recently, in a regulatory filing, Gujarat Alkalies & Chemicals said that “considering the requirements of various local authorities like municipal corporations & municipalities and other essential industries, the Company has started partial operation of Hydrogen Peroxide Plant at Vadodara Complex.”
The company had obtained prior permission from the district authority concerned.
“Based on the requirement, the company may start operation of other plants including Sodium Chlorate Plant at Dahej Complex to meet such demand,” the filing said.
(IANS)
