Chemicals – Sector Update – Earnings visibility dims as EPS cuts continue
Published on 20 Feb 2026
Declining demand, falling realizations and spreads, inventory de-stocking, and continued dumping combined with rising overcapacity across key chemical chains and weak visibility, have led to sharp downward revisions in consensus estimates for specialty chemical companies under our coverage. Such sharp EPS cuts have resulted in sliding stock prices, with a few names nearly halving over the past few quarters, along with de-rating. Since FY24-end, companies have witnessed upto 67% cut in FY26 estimates- Aarti Industries-56%, Deepak Nitrite-57%, Laxmi Organics-58%, PCBL-62%, and NOCIL-67%, Clean Science-44%, Jubilant Ingrevia-33%, SRF-27% and Vinati Organics-15%. FY27 consensus estimates have also witnessed up to 60% cut.
In contrast, Fine Organics remains relatively resilient, with FY26/FY27 estimates cut by only 7%/18%, while Navin Fluorine stands out with 15%/21% increase. Compared with the previous quarter (Q3FY26), current consensus estimates have moved up sequentially for a few names, led by Aarti Industries (15%) and Navin Fluorine (13%). However, the majority still witnessed further trims, with the sharpest sequential cuts seen in PCBL (35%), Deepak Nitrite (7%), PI Industries (7%), and Gujarat Fluorochemicals (6%). These indicate that earnings expectations remain under pressure, despite selective upticks.
