The research house said FY19 earnings are likely to be clouded by hedging losses and debt revaluation, so it focuses on earnings for FY20, by when the recurring impact on earnings should become more visible.
According to the brokerage, Deepak Nitrite (DNL), UPL and Atul are likely to be among the leading beneficiaries. It expects Aarti, SRF, Navin Fluorine, Rallis and Tata Chemicals to record more modest benefits while Bayer, Coromandel and GSFC – all net importers – may face some near-term challenges.
Rupee depreciation is likely to hit badly net importers of commodities as they have pay more to buy raw material or finished products. On the contrary, exporters will definitely be major beneficiaries.
More the exposure to imports, severe the impact of rupee fall. One of the sectors that may be impacted is chemicals and agrochemicals, but IIFL feels the impact will not be same for all. While exporters can pass on to customers the cost advantage of rupee fall, in case of importers which can't pass on import cost, the pressure can likely go beyond FY19.
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Source: https://www.moneycontrol.com/news/business/markets/falling-rupee-may-impact-chemical-agrochem-sector-top-8-stocks-that-can-fetch-10-40-return-2995791.html
