Chemical stocks were in focus today as a sharp surge in refrigerant gas prices globally drove significant gains across the sector. Stocks of SRF Limited and Navin Fluorine International Limited (NFIL) led the rally, with both gaining 10% intraday. The chemical sector index witnessed robust activity, buoyed by strong fundamentals and increasing global demand.
Key Developments:
A leading U.S. distributor of refrigerant gases raised alarms over the supply constraints of R32 and R125 gases, which are critical for the HVAC (Heating, Ventilation, and Air Conditioning) industry. These constraints are causing price hikes, positively impacting Indian chemical companies with significant capacities.
Capacity and Financial Implications:
- SRF Limited:
- R32 Capacity: 29,000-30,000 tons
- R125 Capacity: ~7,000 tons
- Financial Impact: Every $1/kg increase in R32 realization could boost SRF’s EBITDA by ₹2,600 crore, while a $1/kg hike in R125 prices could add ₹600 crore.
- Navin Fluorine (NFIL):
- R32 Capacity: ~4,500 tons currently, expected to double to ~9,000 tons by February 2025.
- Financial Impact: Starting February 2025, every $1/kg increase in R32 prices could result in an incremental EBITDA of ₹770 crore.
Stock Performance Highlights:
Here’s how major chemical stocks performed today:
| Stock | BSE Price (₹) | NSE Price (₹) | % Change |
|---|---|---|---|
| SRF Limited | 2,478.05 | 2,586.00 | +10.00% |
| Navin Fluorine | 3,579.30 | 3,842.45 | +10.00% |
| Deepak Nitrite | 2,440.00 | 2,494.50 | +2.37% |
| Balaji Amines | 1,743.95 | 1,883.35 | +8.18% |
| Sudarshan Chemical | 1,136.60 | 1,107.50 | +2.80% |
| Atul Ltd. | 6,869.25 | 6,969.70 | +1.77% |
| Tata Chemicals | 1,004.60 | 1,018.60 | +1.48% |
| Chemplast Sanmar | 483.60 | 502.95 | +2.28% |
| Clean Science & Tech | 1,400.10 | 1,457.40 | +3.03% |
Broader Sector Impact:
The surge in refrigerant gas prices, especially R32 and R125, has provided a tailwind to companies with significant exposure to the segment. While SRF Limited and Navin Fluorine remain the biggest beneficiaries, other chemical players like Deepak Nitrite, Sudarshan Chemical, and Atul Ltd. have also gained on improved sentiment.
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