Chemical substances & Fertilizers: Inventory Choice is Key
The chemical substances house has been abuzz, particularly after Navin Fluorine surged 16% on sturdy quarterly numbers. Khemka believes this energy displays strong momentum throughout key enterprise segments.
“If we segregate, there are numerous sub-segments. Navin Fluorine got here out with a powerful efficiency throughout all segments. Robust development continues within the CDMO enterprise and in specialty chemical substances,” he mentioned.
He added that whereas Navin Fluorine stands out with sturdy outcomes, friends like SRF confirmed some softness.
“If one have been to see the SRF numbers, that was a bit disappointing by way of the general development, so a little bit of combined cues coming in from each the gamers. So clearly, Navin has an higher edge,” he defined.Nonetheless, Khemka cautioned that valuations within the sector are elevated, and buyers should be selective.“We had seen a run-up, particularly in case you have a look at R22 chemical costs globally — they’re coming off from the highs, and that’s the reason a few of these inventory costs additionally mirrored that sort of weak point. However nonetheless, it’s important to be inventory selective in that house,” he famous.
On fertilizers, Khemka identified that authorities coverage assist and bettering world provide chains are key positives. He stays upbeat on Coromandel Worldwide and PI Industries.
“Coromandel is backward integrating which can enhance margins and capability enlargement, plus one thing like PI Industries, which is an agri-inputs firm — these two shares inside the speciality chemical substances and agrochemical section are one thing that we like,” he mentioned.
SBI: Count on a Regular Quarter
When requested about State Financial institution of India’s (SBI) upcoming outcomes, Khemka sounded assured in regards to the lender’s efficiency.
“When you have a look at among the bigger banking names, they’ve come out with sturdy numbers, particularly the likes of ICICI. ICICI and SBI are the 2 banks within the bigger banking house which have persistently reported sturdy numbers,” he noticed.
He added that enchancment in margins and asset high quality proceed to underpin their outlook.
“Asset high quality for each stays fairly sturdy and SBI has proven one of many highest protection ratios. We count on a gentle quarter from SBI as properly. We now have a constructive view on SBI with a purchase ranking,” Khemka mentioned.
Metals: Turning the Nook
The metals sector, which has seen sturdy value motion these days, can also be discovering renewed optimism from world cues.
“Positively the outlook for metals is popping constructive throughout the road. We just lately upgraded Tata Metal from a impartial to purchase,” Khemka revealed.
In keeping with him, Tata Metal stands to learn from bettering realizations, operational efficiencies, and sturdy home demand.
“Tata Metal tends to realize from the bettering metal value realization, elevated working efficiencies, and a powerful home demand atmosphere. Plus, safeguard duties carried out for the home trade must also assist the enterprise,” he defined.
International developments are including to the optimism.
“There’s a constructive read-through from what the US-China talks are occurring… no less than the rhetoric will come down, whether or not there’s a deal or not, however that ought to support and be constructive for base metallic costs,” Khemka mentioned.
He additional highlighted the corporate’s monetary prudence.
“Tata Metal has very sturdy working money flows. They’re enlargement with out growing leverage, sustaining sufficient stability sheet self-discipline. That’s main us to giving an improve on Tata Metal to purchase with a goal value of ₹210,” he concluded.
