Page 166 - CW E-Magazine (31-12-2024)

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sector participants recorded volume remain stable over the remaining FY25 10%) and 9.3% (8.2%; 5.4%), respec-
growth both domestically and in the amid healthy market dynamics. Mar- tively. Margins within the pigment seg-
export market, although prices remained gins within the dyes segment improved ment in 2QFY25 are on par with the
weak. Domestic demand remained over 1HFY25, in line with demand median segment margins witnessed
better than export demand. The better- recovery seen within the textiles sector. over the past 30 quarters. The margin
than-normal monsoons in the Kharif The agency expects the performance recovery within the pigments segment
season supported 2QFY25, although of the dyes segment to improve further has been better and quicker, consider-
there was some delay and incessant gradually over the remaining FY25, ing the diverse end-use applications
rainfall in certain parts. The higher considering the likely low-but-modest across paints, printing inks, ceramics,
reservoir and soil moisture levels amid demand growth in textiles globally, plastics, and cosmetics, compared to
gradually depleting high-cost invento- especially from the EU and US. The dyes which are primarily dependent
ries could aid sector participants over domestic textile demand growth momen- on the textile sector where the global
2HFY25. The sector recorded 6-7% tum is expected to be sustained in FY25 demand has been weak.
y-o-y revenue growth in 2Q, primarily in line with the Private Final Consump-
due to higher sales volumes led by a tion Expenditure growth of around 7% Strong margins within certain
higher domestic demand though pro- y-o-y, thereby supporting players with chemistries; some improvement
duct prices remained benign. a large domestic share. Ind-Ra expects across others
the dyes segment in FY25 to record Ind-Ra has assessed quarterly mar-
The sectoral margins were largely weaker margins than the pigments gins across various chemistries since
on par y-o-y and q-o-q at around segment which has more diversifi ed FY18 (30 quarters) to understand their
13.4% in 2QFY25 (1QFY25: 13.3%; end-uses. 2QFY25 margins against the average
2QFY24: 14.2%), led by players with margin profi le within the chemistry.
a higher domestic market share which The sector recorded revenue growth The pigments, styrene, oleochemicals,
recorded a strong improvement in volu- of 23% y-o-y in 2QFY25 (dyes: up thermoplastics and carbon black seg-
mes y-o-y. Sector players with a large 15% y-o-y; pigments: up 33% y-o-y), ments recorded margins higher than its
export share recorded lower margins refl ecting a continued recovery in ope- average margin profi le. On the fl ipside,
y-o-y, despite some volume improvement rations over 1HFY25 after weak fun- soda ash, caustic soda, benzene, fl uo-
due to the weak pricing environment. damentals were witnessed over FY24. rine, dyes, PVC and amines recorded
In 2QFY25, the overall sector mar- 2QFY25 margins lower than the aver-
Pigments continue to record robust gins improved y-o-y to around 10% age margin profi le. However, margins
margins; margin recovery within (1QFY25: 10.7%; 2QFY24: 7.4%) across these chemistries showed some
dyes segment with the margin recorded by pigments semblance of improvement in 2QFY25
Ind-Ra expects pigment margins to and dyes segments being 13% (13.3%; y-o-y.

FY21 FY22 FY23 FY24 FY25
Chemical segment (%) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Soda ash 16 16 20 14 20 17 19 22 27 24 24 22 29 21 15 15 16 17
Pthalic anhydride 1 17 27 32 24 19 22 23 17 13 8 2 9 4 -5 3 8 6
Caustic soda 14 19 16 14 20 16 28 28 34 25 24 17 13 10 11 9 15 13
Benzene 25 26 25 24 23 21 33 21 19 18 19 19 17 18 17 16 17 15
Fluorine 25 27 25 24 25 25 27 27 27 25 27 28 23 19 20 19 19 18
PVC 6 24 34 34 24 34 28 19 10 -16 3 16 10 12 8 14 17 12
Dyes 1 9 14 13 11 11 13 9 8 6 5 7 7 5 6 6 8 8
Pigments 17 18 18 14 14 11 11 11 10 10 7 6 9 10 11 13 14 14
Styrene -6 17 27 29 22 17 17 21 17 7 10 12 8 10 10 11 11 0
Oleo chemicals 17 17 17 15 13 11 11 18 18 17 18 19 19 16 15 16 17 18
Thermoplastics -11 16 37 40 33 30 21 23 18 10 10 9 13 15 13 14 15 15
Amines 28 29 32 32 29 22 20 19 25 20 16 17 20 14 19 22 19 18
Carbon black 7 14 19 16 13 13 11 9 11 11 11 13 15 16 17 17 17 18
Fig. 3: Bottom of cycle conditions in FY24; gradual recovery over FY25
Source: Company quarterly results & presentations, Ind-Ra

166 Chemical Weekly December 31, 2024

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