ICICI Securities's research report on Sumitomo Chemicals
Sumitomo Chemicals (SCIL) reported EBITDA/PAT of INR 1.3bn/INR 1.1bn, up 12% each YoY (35%/47% QoQ), vs. street’s estimate of INR 1.1bn/INR 0.97bn, driven by a 200bps rise in gross margins. Domestic business grew 4% YoY in both Q4FY26 and FY26 despite adverse agro-climatic conditions, driven by new product launches. The access to global parent–innovator (SSC) technology, aggressive capex, well-diversified portfolio, new product launches, regulatory clearance for bio -stimulant and SSC plans to expand semiconductor chemical in India could support SCIL’s long-term growth. We cut our FY27E earnings to factor in a softer margin environment and upgrade FY28E by 2.8% baking in higher margin and revenue. We maintain our BUY rating with a revised TP of INR 580 (vs. INR 515).
Outlook
We value SCIL using a combination of FY28E PER and EV/EBITDA multiples and we also analyse the valuation range using a historical PEG range, which we believe provides leeway for negative surprises in the fair value. Our derived price is INR 580, implying a 17% % upside hereon.
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Sumitomo Chemicals_01062026_ICICI Securities