Brokerage firm Nirmal Bang has issued a positive outlook for the Indian specialty chemicals sector, forecasting up to 37% upside in companies like Galaxy Surfactants and Rossari Biotech. While the report highlights recovery potential through volume growth, it also flags ongoing sector risks like stiff competition from China.
Nirmal Bang Institutional Equities has released a new thematic report on the Indian specialty chemicals sector, identifying a selective group of companies that could see significant growth. Despite the industry facing persistent headwinds such as weak global demand and heavy competition from China, the brokerage maintains a positive stance on several key players.
The report highlights the potential for a rebound in the sector, driven by an expected normalization in consumption patterns and the introduction of new products. Nirmal Bang has maintained positive ratings on a list of companies, including Navin Fluorine International, Fine Organic Industries, Clean Science and Technology, SRF, and Vinati Organics.
Upside Potential in Galaxy Surfactants and Rossari Biotech
Among the top picks, the brokerage is particularly optimistic about Galaxy Surfactants. It has set a target price of Rs 3,200, which implies a potential upside of approximately 37% from the reference price of Rs 2,335. This outlook is supported by a strong financial showing, with the company reporting a 38.5% year-on-year revenue growth in the first quarter of fiscal year 2027 and a record EBITDA of Rs 252.5 crore. The brokerage anticipates that volume-led growth in both domestic and international markets will continue to support the company through FY28.
Rossari Biotech is another key name, with a target price of Rs 660, suggesting a potential upside of about 32% from the Rs 501 mark. While the company focuses on volume expansion and improving its balance sheet, investors may note that Rossari Biotech recently withdrew from participation in the Nirmal Bang Semi-Annual Investor Conference scheduled for August 10, 2026. The brokerage acknowledges near-term demand challenges that continue to impact the company’s core business segments.
Navigating Industry Pressures
While the outlook for these companies appears positive, the brokerage cautioned that the broader specialty chemicals sector is not without risks. The industry continues to grapple with aggressive capacity expansion by Chinese manufacturers, which keeps pressure on global prices and margins. Furthermore, feedstock price volatility, often linked to fluctuations in crude oil prices, remains a recurring factor that can affect profitability.
For investors, the key monitorables will be whether these companies can successfully execute their volume expansion strategies amid global demand uncertainty. The sector’s ability to manage margins in the face of intense international competition and fluctuating raw material costs will likely dictate the actual performance of these stocks in the coming quarters.