INSTITUTIONALEQUITYRESEARCH

SpecialtyChemicalIndustryConclave
Keytakeaways:Reaffirmslongtermvaluegrowth

3October2016


We organised a Specialty Chemicals Industry Conclave on 28th September SuryaPatra(+912266679968)
spartra@phillipcapital.in
2016 in Mumbai. In this daylong event, we hosted the following eminent

dignitaries from the Indian specialty chemicals sector in a panel discussion MehulSheth(+912266679996)
followedbyboardroommeetingswithparticipatingcompanies. msheth@phillipcapital.in


Panelparticipants

LeadingspecialtychemicalsconsultantfromShanghai,China
MrShekharKhanolkar,MD,NavinFluorineInternational
MrRKAgarwal,President,AllIndiaPlasticsManufacturersAssociation
MrSanjeevGPatil,GroupCFO&HdStrategy,FairchemSpecialty(Adi
Finechem)

MrKARamakrishnan,Director,AvalonGlobalResearchGlobalspecialty

chemicalsconsultant

Boardroommeetingparticipants:
NavinFluorineInternational
LeadingChineseconsultant
VikasEcoTech
Hikal
ShreePushkar
FairchemSpecialty(AdiFinechem)
MeghmaniOrganics
I.G.Petrochemicals
DCW
Apcotex
AIPMA(MrRKAgarwal,President)
AvalonGlobalResearch

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Takeawaysfromthepaneldiscussion
ReassuressustainedacceleratedvaluegrowthforIndianspecialtychemicals

ThepaneldiscussionandadetailedpresentationontheChinesechemicalindustryby
one of Chinas leading chemical consultants reaffirmed our thesis of Accelerated
valuegrowthfortheIndianindustry.

The panellists believed that the Indian specialty chemicals industry is set to sustain
growth because of healthy domestic demand, backed by strong GDP progress, and
rising per capita income. However, the panel emphasised the need to invest in
technology platforms, R&D, and IPR, in order to differentiate, create greater
customervalue,anddevelopstrategicpartnershipswithcustomers.

Additionally,apresentationbyoneoftheleadingchemicalconsultantsfromChinaon
theongoingchallengesoftheChinesechemicalindustryconfirmedtheincremental
exportsopportunityfortheIndianspecialtychemicalsindustry.Keyhighlightsabout
ChinaandtheinferencesfortheIndianindustryaredetailedbelow:

Chinas emerging middle classes are health conscious and forcing the
government to fight pollution; as a consequence, regulation of the
chemicalindustryinChinahastightenedintherecentpast

Chinasgovernmenthasmadeitmandatoryforchemicalplantstooperate
fromchemicalparks.Sinceonly~45%ofthatcountryschemicalindustryis
currently based out of such parks, it implies major plant shutdowns or
relocationsoverthenextcoupleofyears.

Inference for the Indian industry: With the implementation of strict environment
policies in 2015, the Chinese chemical industry has already seen over 1,000 plant The Chinese chemical industry has
shutdownsand~15%yoydeclineinchemicalexportsinCY15.Suchascenarioislikely already seen over 1,000 plant
tocontinueforacouplemoreyearsasamajorpartoftheChineseindustryislikely shutdowns and ~15% yoy decline in
shifttothegreenbelt.SinceChineseexportofspecialtychemicalsis~10timeslarger chemicalexportsinCY15
than the Indian industry, a visible slowdown in China could multiply the size of the
Indianspecialtyindustryoverthenextcoupleofyears.

Two important themes from Chinas new fiveyear plan emerge (1)
innovation, and (2) implementation of environmental protection. Under
innovation,thefocusisonmovingupinthevaluechainbyreducingheavy
industry (implying pressure to cut overcapacity in basic chemicals) and
developingR&Dcapabilityinselectedspecialtychemicals.

While the Chinese government has come down harshly the polluting
chemicals industry, it is keen to provide adequate facilities for complex
chemistryR&D.Withinthis,itsfocusistowardssegmentsthatcanachieve
globalscale,butnotonsegmentsthatrequiremorecustomisation.

Inference for the Indian industry: Chinas planned efforts to reduce

overcapacityinbasicchemicalscouldreducedumpingofmanychemicalsinthenear
future, leading to stabilisation in prices of various basic chemicals. Additionally, it
wouldsupplementthoseIndiancompanieslookingformegabasicchemicalsprojects
as a strategy to play on import substitution; for example, Deepak Nitrites mega
phenolplantwithaninvestmentofoverRs10bnwouldbenefit.

Although the Chinese government is keen to supplement innovation towards

complex chemistry, its core focus remains on scalable segments. Conversely, the
Indianindustryhasbeenfocusedoncustomisedproducts.Therefore,webelievethat

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SPECIALTYCHEMICALINVESTORSDAY KEYTAKEAWAYS

withitsstrategicfocusonbenzenederivativesandmoreoncustomisedproductsofa
largeportfolio,AartiIndustries(ARTOIN;ourtoppick,TPofRs740)shouldbenefit.

European chemical companies in China also fear being affected by

increased regulation concerning (1) penalties imposed on pollutants, (2)
excessive data requirements for new intermediates, and (3) clarity about
hazardouschemicalsandtheirhandling.

Salaries as well as operating costs in China are rising relative to

neighbouringcountries.

Inference for the Indian industry: Chinas excessive restrictions on its

chemicalsindustryhasalreadymadeMNCsstartthinkingaboutIndiaasanalternate
source, resulting in rapid flow of foreign direct Investment (FDI) into India. We
believethiscouldleadtoconsolidationandimprovetheoperatingefficiencyofthe
fragmentedIndianindustry.

FocusareasforChinaincludeorganosilicon,organicfluorinecompounds
(not refrigerants), engineering plastics, thermoplastic elastomers,
composite materials, polyurethane, synthetic rubber (isoprene rubber),
highperformance carbon fibre, membranes for water treatment, coal
chemicals including downstream derivatives, watertreatment chemicals
andsolutions,andelectronicchemicals.

Inference for the Indian industry: In its focus areas (see paragraph above)
ChinawouldoffertoughcompetitiontoIndianpeers,astheChinesegovernmentis
likelytofacilitatebusinessfortheseareas.Ontheotherhand,theabovementioned
segments are the future area of growth as China the global manufacturing hub of
chemicalbelievesso.

However, Indias industry is favorably placed in the following segments

agrochemicals,coatings(particularlysolventbased),coloursanddyes,intermediates,
leatherchemicals,refrigerants,rubberadditives,andtextilechemicals.

The players like SRF and Navin Fluorine will be benefited from visible growth
opportunities in fluorospecialty (For pharma and agro applications due to the
innovationinvolvedinthebusiness).OnthecontradictoryGujaratfluoromightface
toughcompetitionfromchina.

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NavinFluorineInternational
Focustowardsfluorospecialtytodrivevaluegrowth

Aboutthecompany: NFILisintofluorinechemistry,producingrefrigerationgases,
some basic building block fluorides, and specialty organofluorine. Its inorganic
fluorides offer a portfolio of products that have applications in industries such as
stainlesssteel,glass,oilandgas,abrasives,andelectronics.Inspecialtychemicals,it
manufactures fluorinebased molecules for pharmaceuticals, agrochemicals, and
petrochemicals industries. It offers CRAMS for customchemical synthesis of
fluorinatedcompoundsforpharma,agrochemicals,andspecialtychemicals.

Keytakeawaysfromtheconference:

Refrigerantgassegment
Refrigerant gas segment contributed ~34% of sales in FY16, but the HCFC gas
phaseoutwillnothaveanymajorimpactonvolumesinthenearterm.However,
NFILdoesnothaveanydiversificationplansthatwouldderiskthephaseout.
NFILindicatedastableR22pricingscenariointhedomesticmarket,butexpects
pricing pressure in exports to continue, largely due to Chinese dumping. It
expectsstabledemandandpricingscenariointhenearfuture.

Specialtychemicals
It is focusing on developing a strong portfolio of valueadded specialty fluoro
intermediatesandintroducingnovelmoleculestoexpanditsproductofferings.
Successfully commercialised ~15 new fluorinated compounds over the last few
years.
NFILindicatedthattheslowdowninitsagrochemicalsbusinesswouldcontinue
forthenextfewyears;hence,itisfocusingmoreonpharma.

CRAMS
Byleveragingitsskillsinfluorinationchemistry,NFILwillseestrongtractionfrom
CRAMSbusinessforpreclinicaltrialsandR&Dsupplies.Manytopglobalpharma
innovatorsareitskeycustomers.
Key global competitors include Wuxi (China), Lonza (Europe), and Arkema
(Europe)allmuchbiggerthanNFIL.
Thecompanysees1.5xassetsturnover(ATO)fromDewasbyFY19.
Its R&D strength: ~160 at Dewas, 3035 at the Surat R&D centre, and 2025 at
MOL(Manchesterorganicslimited).

Others
JVwithPiramalisontrack;expectstostartcommercialproductionbyQ4.Itsees
1.2xATOwithin1218monthsofcommercialisation.
ExpectsJVwithGMDCforfluorspartobecompletebytheendofFY17.
Sees no major capex in the near term (annual maintenance capex of Rs 250
300mn).
There has been a management change in the MafatLal group (Hrishikesh
MafatlalcompletelymovedoutofNFILandVishalMafatlalwillbeheadingit).It
doesnotexpectanyoperationalimpactduetothesechanges.

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Hikal
Newproprietaryproductstoleadprofitablegrowth

About the company: Hikal is a reliable longterm partner to companies in the

pharmaceuticals, crop protection, and specialty chemicals industries. It supplies
research services, active ingredients, and intermediates, manufactured using
stringent global quality standards for its global customers. Cropprotection facilities
arelocatedatTalojaandMahad(Maharashtra).HikalsR&Dfacilitiesarelocatedat
Pune. Its pharmaceutical manufacturing facilities are situated in Jigani (Bangalore)
andPanoli(Gujarat).

Keytakeawaysfromtheconference:
Hikalexpectstodoublerevenuesin45yearsatasustainableEBITDAmarginof
2022%,withbothpharmaandagrichembusinessescontributingtogrowth.
Inpharma,itanticipateslaunchingfournewproductswhichwoulddrivenear
termgrowth.
Inagrichemicals,Hikalgrewby6%inFY16whileothercompaniescontractedby
810%whichshowsthestrengthofthecompanyanditsproducts.
Hikalexpectsnewproductstoform20%ofrevenuesafterthreeyears.
Itisthelargestsupplierofgabapentin,whereDivisisacompetitor.Inagrichem,
PIIndustriesisitsdomesticcompetitor.
In its matured product segments, competitors are backing off. Therefore, Hikal
seesbettervolumesaswellasvalueprospectshere.
CapexofRs1.5bnalmostequallydistributedtowardspharmaandagrichemin
thelastthreeyears.
Currentpharmautilisationis~80%whileitis~60%foragrichem.
Asset turnover is low since Hikal is fully backward integrated for most of its
products.Itisalsolookingtooutsourcefewproducts,especiallyinthepharma
space,toincreaseitsassetturnover.
Hikal has become more aggressive and is looking at expanding its presence in
newmarketssuchasLatinAmericaandtheMiddleEast.

I.G.Petrochemicals
Productleadershiptosustaingrowthmomentum

Aboutthecompany:I.G.Petrochemicals(IGPL)isaleadingmanufacturerofphthalic
anhydride (PA) from India and claims to be the third largest in the world with a
capacityof170,000tonnesannually.ItisamongstthelowestcostPAmanufacturers
intheworld.PAhasawiderangeofapplicationinenduserindustriessuchastextile
dyes, printing inks, plastic products, paints, and packaging materials. For IGPL, in
FY16,plasticisercontributedthehighesttosales(41%)followedbypaints(16%),CPC
pigments(10%),polyesterresin(14%),andothers(19%).

Keytakeawaysfromtheconference:
IGPLisoneofthelargestproducersofPAglobally.PAisadownstreamproduct
of orthoxylene (OX) a basic petrochemical used in plasticizers, unsaturated
polyster resins, alkyd resins/polyols. It has application in industries including
packagingmaterials,paints,textiledyes,printinginks,andplasticpipes.Itskey
customersincludeBerger,KansaiNerolac,AkzoNobel,andMeghmaniOrganics.
Phthalate plasticizer is the largest application segment of PA, accounting for
~60%ofPAbeingusedbythePVCindustry.Pigment(blueandgreen)andUPR
areothersignificantendusersofPA.
IGPLhasthreeunitsatMIDCandTalojainRaigadwithatotalcapacityof169,250
MTPA.ItcommandsmorethanhalfofIndiastotalinstalledcapacityof~300,000
MTPA.

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Global PA consumption stands at 5.5mn tonnes, out of which 50% account for
AsiaPacificconsumption.DemandintheAsiaPacificregionisexpectedtoshow
6.4% CAGR until 2019, while the India PA industry is likely to grow at 78%
annually.
IGPLs competitive advantages are (1) it is a lowcost producer, and (2) it has
lowcustomerconcentration(noclientaccountsformorethan10%ofitssales).
OutofitstotalannualsalescontractswithIndiancustomers,3040%arefixed
margin.
The antidumping duty levied on imports of PA has ensured that the domestic
marketisinsulated;however,importsoriginatingfromTurkeyandBelaruspose
achallengetoIndiasPAindustry.

MeghmaniOrganics
Improvementincapacityutilisationwillbethekeytogrowth

Aboutthecompany:MEGHisawelldiversifiedchemicalsplayeroperatinginthree
segments, i.e., pigments, agrochemicals, and basic chemicals. Pigments account for
33%ofitsnetsales,agrochemicals31%,basicchemicals28%,andothers8%.MEGH
is now present in 75 countries with over 400 clients. Its pigments business enjoys
strong global presence with exports accounting for 72% of net sales. Customers
comprisemainlyofMNCssuchasSunDIC,FlintGroup,AkzoNobel,DuPont,andPPG
Industries90%businesscomingfromrepeatcustomers.

Keytakeawaysfromtheconference:
MEGH is the largest manufacturer of phthalocyaninebased pigments in the
world, with a global volume market share of ~7%. Its vertically integrated
facilitiesforCPCblueandendproductssuchaspigmentgreenandpigmentblue
give it a competitive advantage the pigments are crude derivatives and their
pricesarerelativelystabledespitesharpcorrectionincrude.
MEGH has invested Rs 5.6bn over FY1116 to build capacities in all three
segments; however, there are no major CAPEX plans over the next two years.
MaintenanceandproductregistrationCAPEXwouldbearoundRs300400mnin
FY17.
Ithasrecentlyexpandeditsdistributorsanddealerschainto2,300(from1,000in
FY15)across17states.Moreover,itplanstoexpanditsdealernetworkfurtherto
7,0008,000tohaveaPANIndiapresenceinthenexttwoyears.
In pigments, MEGH is focusing on highmargin paint and plastic markets,
whereas in basic chemicals it has added a new caustic potash facility at Dahej
withaninvestmentofRs650mnwitharevenuepotentialofRs1.25bn
MEGHsclosingdebtstandatRs2.81bn;itplanstorepayRs600mninFY17.
Itindicatednoadditionallongtermdebtenteringthebalancesheet,asithasno
newmajorcapexplansforthenexttwoyears.
China movement has no major impact on its business, as MEGH is mainly into
pigmentsandinsecticidesandChinaisanetimporterofthesechemicals.

VikasEcoTech
Rampupinspecialtyadditivesisthekey

About the company: Vikas was incorporated in 1984. It is into manufacturing and
distribution of specialty polymer compounds and additives since 1998. It
manufactures highend products used in agriculture/infrastructure components,
wires & cables, auto parts, textiles, electrical goods, medical goods, writing
instruments, organic and inorganic chemicals, footwear, and packaging, among
others.

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Keytakeawaysfromtheconference:
Its business segment includes specialty rubber/plastic compounds (~59% of
sales),specialtyadditives(22%),andtrading(19%).
InFY16,ithadsalesof500MTPAtodomesticmarketsandexportsof1058MTPA.
Itexpectssalestojumpto800900MTPAindomesticandexportsat1600MTPA
inFY17.
VikashasplannedaninvestmentofRs300mntoaddaneworganotinstabilisers
capacity of 1200MTPA by October 2016 (current capacity at 1800MTPA) and
another 6000MTPA capacity addition in Dahej (land acquired and civil work
started),aswellas5,000MTPAcapacityadditioninspecialpolymerbyFY18.
ItfacesglobalcompetitionfromtwolargecompaniesGalatinandPMC.
Itsproductsarepricedat24%discounttotheUSmanufacturersprices,andata
slightpremiumtoChineseones.
ItscurrentlistofclientsincludesPrince,Bassillprompt,andApolloPipes.
Its working capital cycle was 180 days in FY16, which it plans to reduce to 34
monthssoon.
It has developed R&D capability to meet international standards of quality,
resultinginseveralinterestsfromtheLatAmmarket.Ithasinitiatedtrialorders
foroneofMexicosleadingpetrochemicalgiantsfororganotinstabilisers.
It is focused on acquiring new clients from PVC pipes, footwear, automobiles,
and packaging sectors in India (to supply specialty additives and plastic
compounds).

FairchemSpecialty(AdiFinechemicals)
Businessinsafehandsforstronggrowth

Aboutthecompany:FairchemSpecialtyisamergedentityofAdiFinechem(AFC)and
PriviOrganics(PO).AFCisanIndiabasedcompanymanufacturingoleochemicalsand
intermediate neutraceuticals. It manufactures products such as linoleic acid, dimer
and monomer acid, and nutraceutical intermediates such as natural mixed
tocopherol concentrate. It has a manufacturing unit at Sanand in Ahmedabad,
Gujarat.PriviOrganicsisoneoftheleadingmanufacturersofaromachemicalssuch
as Amber Fleur, dihydromyrcenol (citrus character), and citral derivatives. The
combinedentitywillberenamedFairchemSpecialty.Privienjoysadominantposition
and economies of scale in all its product categories. Moreover, its new production
site (Unit3 at Mahad) began commercial production and would provide longterm
stabilitytothebusiness.

Keytakeawaysfromtheconference
Fairfax acquired 45% stake in the company in February 2016 and the company
willberenamedFairchemSpecialityLtdafteritsmergerwithPriviorganics.
Inconsiderationofthemerger,Adiwillissue27equitysharesofRs10eachand
27compulsoryconvertiblepreferencesharesofRs10eachforevery40equity
shares of Rs 10 each of Privi. The swap ratio is based on Privis postmoney
equityvalueofRs7,250mnandAdismarketcapofRs3,969mn.
ThetwocompaniesAdiandPriviproduce60+typesofhighperformanceniche
chemicalswithenduseinvariedindustriessuchaspaints,adhesive,inks,FMCG,
andperfumes.
Themergedcompanywilldevelopprocessestoaddvaluetovariousbyproducts
formedinthemanufacturingprocess,leadingtofurtherexpansionofoperating
margins.
Afterthemerger,itexpectsturnovertodoublein45yearswithAdicontributing
Rs1.7bnandPrivicontributingRs7.7bn.
AdiFinechemhasexpandeditscapacityto45,000MTPAin2016from8,000MTPA
in 2010, and Privi Organics has an installed capacity of 22,000MTPA (four
manufacturingplants).

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Withastrong60memberR&Dteam,Fairchemwilldevelopalternateandmore
competitivemanufacturingroutesandthenscaleupitsprocessfromgramsto
kilograms,tometrictonnes.
Fairchem is working towards scale up of a green enzymatic fatsplitting
technologythatwillprovidecostadvantageoverthetraditionalprocess.Priviis
settingupauniquemodernpilotplantatNaviMumbaiincollaborationwiththe
Institute of Chemical Technology the first of its kind in India to undertake
variousresearchesunderoneroof.

ApcotexIndustries
Newacquisitiontoprovidefilliptogrowth

Aboutthecompany:ApcotexwasstartedasadivisionofAsianPaintsin1980.Itwas
spunoffasaseparatecompanyin1991asApcotexLattices.Itchangeditsnamefrom
"ApcotexLattices"to"ApcotexIndustries"inJune2005.ApcotexIndustriesisoneof
theleadingproducersofperformanceemulsionpolymersinIndia.Itsmanufacturing
facilityisatTaloja,25kilometresfromMumbai.ItsproductrangeincludesVPlatex,
carboxylated and noncarboxylated SB latexes, acrylic latex, nitrile latex, and
syntheticrubber.

Its latex product range is used for paper/board coating, carpet backing, concrete
(concretemodification,waterproofing),tyre,paint,textilefinishing,andautomotive
components. Its synthetic rubber product range is used for footwear and other
products. It has an ISO certification and has received several awards for
manufacturing.

Keytakeawaysfromtheconference:
ApcotexrecentlyacquiredOmnovaSolutions.
Itproducesbothsyntheticrubber(~35%sales)andnitrilerubber(~65%sales).
Apcotexexpectsnitrilerubbergrowthtobestrong(1015%)inthemediumterm
due to its huge potential in domestic and export markets; synthetic rubber
growthwouldbeflatinthemediumterm.
Goingforward,ApcotexplanstomanufacturesyntheticrubberinTaloja.
Omnova Solutions, at the time of acquisition, had negative EBITDA margin;
currently it has an EBITDA margin of 34% and Apcotex plans to bring it to 12
14%inthemediumterm.
Apcotexhas42%marketshareinpaper&paperboardcoating,25%shareintyre
coating,60%+shareincarpetbacking,85%shareinsyntheticrubber,andisalso
stronginconstructionchemicals,footwearsoles,andtextilefinishing.
ItplanstoinvestRs400mnoutofwhichRs300mnwillbeinvestedontheValia
plant(Gujarat).
Itexpectsvolumestoincreaseby1015%everyyear.

ShreePushkarChemcials&Fertilisers
Diversificationintherightdirection

Aboutthecompany:Recently,SPCFLconcludedanIPOworthRs700mnforsetting
upofaplantformanufacturingreactivedyesalongwithplantsformanufacturingof
hacidandvinylsulphoneesteronanewplotoflandnearitsexistingworksatMIDC
LoteParshuram,districtRatnagiri.Itscapacityexpansionincludes750tpaofhacid,
1,000tpaofvinylsulphone,and10,000tpaofsulphateofpotash(SOP)forfertiliser.
CapexonthesethreeprojectswouldbeRs480mn.

SPCFLmanufacturesdyeintermediateswithacapacityof7,836TPA.Itsproductline
comprises of dye intermediates (gammaacid, kacid, vinyl sulphone, hacid), acids
(sulphuric acid, oleums), cattlefeed supplement (di calcium phosphateDCP), and

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SPECIALTYCHEMICALINVESTORSDAY KEYTAKEAWAYS

fertilisers(singlesuperphosphateSSP,soilconditioner).Capacity3,000tpafordyes,
750tpaforhacid,and1,000tpaforvinylsulphone.

Domestic clients include Vinati Organics, Atul, DCM Shriram, Megmani Dyes, and
Amul; Huntsman among international clients. It has an exclusive marketing
arrangement with Shriram Chemical & Fertilizers for SSP in Maharashtra and
KarnatakaandhastiedupwithShivamChemicalsformarketingofDCPinKarnataka.
It has also launched its own soil conditioner brand named Dharti Ratna. It has 125
dealers.

Keytakeawaysfromtheconference:
Dyeintermediateshavea74%share,fertiliser16%,andDCP/sulphuricacid8%in
termsofbothvalueandvolumes.
Thedyebusinessresultsinacidproductionalongwithsignificantwaste,butthe
company created demand for its byproducts and converted its waste into
commercially viable products which made it a zerowaste player, thereby
improvingitsoperatingefficiency.
It began operations for new reactive dyes plant with a capacity of 3,000MTPA
andadditionalvinylsulphonecapacityof1,000MTPAinQ1FY17.Italsoplansto
expanditsdyescapacityfurtherto6,000MTPAbytheendofQ3FY17.
Tomeetitscaptiverequirement,SPCFLwilladdtwoplantsfordyeintermediates
andplannedhacidcapacityof750MTPAislikelytobecommissionedinQ2FY17.
IthasreceivedalicenseformanufacturingmixedfertiliserNPKinMaharashtra.It
has a marketing tieup with DCM Shriram, which it launched under the brand
ShriramUrjaMixinMaharashtra.
In August 2016, it commissioned Sulphate of Potash (SOP) with a capacity of
10,000MTPA;commercialproductionwillbeginfromSeptember2016.Itisalso
setting up a calciumchloride plant with a capacity of 7000MTPA to utilize HCL
(hydrochloricacid)generatedinSulphateofPotash.
SPCFL is looking at exploring a growth opportunity in the textile auxiliary
chemicals space, for which it has created a capacity and expects to start
commercialisationinFY18.

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Management
VineetBhatnagar(ManagingDirector) (9122)24831919
KinshukBhartiTiwari(HeadInstitutionalEquity) (9122)66679946
JigneshShah(HeadEquityDerivatives) (9122)66679735
Research
Automobiles ITServices Pharma&SpecialityChem
DhawalDoshi (9122)66679769 VibhorSinghal (9122)66679949 SuryaPatra (9122)66679768
NiteshSharma,CFA (9122)66679965 ShyamalDhruve (9122)66679992 MehulSheth (9122)66679996
Banking,NBFCs Infrastructure Strategy
ManishAgarwalla (9122)66679962 VibhorSinghal (9122)66679949 NaveenKulkarni,CFA,FRM (9122)66679947
PradeepAgrawal (9122)66679953 DeepakAgarwal (9122)66679944 Telecom
PareshJain (9122)66679948 Logistics,Transportation&Midcap NaveenKulkarni,CFA,FRM (9122)66679947
Consumer&Retail VikramSuryavanshi (9122)66679951 ManojBehera (9122)66679973
NaveenKulkarni,CFA,FRM (9122)66679947 Media Technicals
JubilJain (9122)66679766 ManojBehera (9122)66679973 SubodhGupta,CMT (9122)66679762
PreeyamTolia (9122)66679950 Metals ProductionManager
Cement DhawalDoshi (9122)66679769 GaneshDeorukhkar (9122)66679966
VaibhavAgarwal (9122)66679967 YashDoshi (9122)66679987 Editor
Economics MidCaps&DatabaseManager RoshanSony 9819972726
AnjaliVerma (9122)66679969 DeepakAgarwal (9122)66679944 Sr.ManagerEquitiesSupport
Engineering,CapitalGoods Oil&Gas RosieFerns (9122)66679971
JonasBhutta (9122)66679759 SabriHazarika (9122)66679756
VikramRawat (9122)66679986

Sales&Distribution CorporateCommunications
AshvinPatil (9122)66679991 SalesTrader ZarineDamania (9122)66679976
ShubhangiAgrawal (9122)66679964 DileshDoshi (9122)66679747 BharatiPonda (9122)66679943
KishorBinwal (9122)66679989 SuniilPandit (9122)66679745
BhavinShah (9122)66679974
AshkaMehtaGulati (9122)66679934 Execution
ArchanVyas (9122)66679785 MayurShah (9122)66679945

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42NihonbashiKabutocho,Chuoku ANZTowerLevel23B,JlJendSudirmanKav33A, No550YanAnEastRoad,OceanTowerUnit2318
Tokyo1030026 Jakarta10220,Indonesia Shanghai200001
Tel:(81)336662101Fax:(81)336640141 Tel(62)2157900800Fax:(62)2157900809 Tel(86)2151699200Fax:(86)2163512940
www.phillip.co.jp www.phillip.co.id www.phillip.com.cn

THAILAND:PhillipSecurities(Thailand)PublicCo.Ltd. FRANCE:King&ShaxsonCapitalLtd. UNITEDKINGDOM:King&ShaxsonLtd.

15thFloor,VorawatBuilding,849SilomRoad, 3rdFloor,35RuedelaBienfaisance 6thFloor,CandlewickHouse,120CannonStreet
Silom,Bangrak,Bangkok10500Thailand 75008ParisFrance London,EC4N6AS
Tel(66)222680999Fax:(66)222680921 Tel(33)145633100Fax:(33)145636017 Tel(44)2079295300Fax:(44)2072836835
www.phillip.co.th www.kingandshaxson.com www.kingandshaxson.com

UNITEDSTATES:PhillipFuturesInc. AUSTRALIA:PhillipCapitalAustralia SRILANKA:AshaPhillipSecuritiesLimited

141WJacksonBlvdSte3050 Level10,330CollinsStreet Level4,MillenniumHouse,46/58NavamMawatha,
TheChicagoBoardofTradeBuilding Melbourne,VIC3000,Australia Colombo2,SriLanka
Chicago,IL60604USA Tel:(61)386339800Fax:(61)386339899 Tel:(94)112429100Fax:(94)112429199
Tel(1)3123569000Fax:(1)3123569005 www.phillipcapital.com.au www.ashaphillip.net/home.htm

INDIA
PhillipCapital(India)PrivateLimited
No.1,18thFloor,UrmiEstate,95GanpatraoKadamMarg,LowerParelWest,Mumbai400013
Tel:(9122)23002999Fax:(9122)66679955www.phillipcapital.in

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SPECIALTYCHEMICALINVESTORSDAY KEYTAKEAWAYS

DisclosuresandDisclaimers

PhillipCapital(India)Pvt.Ltd.hasthreeindependentequityresearchgroups:InstitutionalEquities,InstitutionalEquityDerivatives,andPrivateClientGroup.
ThisreporthasbeenpreparedbyInstitutionalEquitiesGroup.Theviewsandopinionsexpressedinthisdocumentmay,maynotmatch,ormaybecontraryat
timeswiththeviews,estimates,rating,andtargetpriceoftheotherequityresearchgroupsofPhillipCapital(India)Pvt.Ltd.
ThisreportisissuedbyPhillipCapital(India)Pvt.Ltd.,whichisregulatedbytheSEBI.PhillipCapital(India)Pvt.Ltd.isasubsidiaryofPhillip(Mauritius)Pvt.Ltd.
References to "PCIPL" in this report shall mean PhillipCapital (India) Pvt. Ltd unless otherwise stated. This report is prepared and distributed by PCIPL for
information purposes only, and neither the information contained herein, nor any opinion expressed should be construed or deemed to be construed as
solicitationorasofferingadviceforthepurposesofthepurchaseorsaleofanysecurity,investment,orderivatives.Theinformationandopinionscontainedin
thereportwereconsideredbyPCIPLtobevalidwhenpublished.ThereportalsocontainsinformationprovidedtoPCIPLbythirdparties.Thesourceofsuch
informationwillusuallybedisclosedinthereport.WhilstPCIPLhastakenallreasonablestepstoensurethatthisinformationiscorrect,PCIPLdoesnotoffer
anywarrantyastotheaccuracyorcompletenessofsuchinformation.Anypersonplacingrelianceonthereporttoundertaketradingdoessoentirelyathisor
herownriskandPCIPLdoesnotacceptanyliabilityasaresult.SecuritiesandDerivativesmarketsmaybesubjecttorapidandunexpectedpricemovements
andpastperformanceisnotnecessarilyanindicationoffutureperformance.
Thisreportdoesnotregardthespecificinvestmentobjectives,financialsituation,andtheparticularneedsofanyspecificpersonwhomayreceivethisreport.
Investorsmustundertakeindependentanalysiswiththeirownlegal,tax,andfinancialadvisorsandreachtheirownconclusionsregardingtheappropriateness
of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future
prospects may not be realised. Under no circumstances can it be used or considered as an offer to sell or as a solicitation of any offer to buy or sell the
securitiesmentionedwithinit.Theinformationcontainedintheresearchreportsmayhavebeentakenfromtradeandstatisticalservicesandothersources,
whichPCILbelieveisreliable.PhillipCapital(India)Pvt.Ltd.oranyofitsgroup/associate/affiliatecompaniesdonotguaranteethatsuchinformationisaccurate
orcompleteanditshouldnotberelieduponassuch.Anyopinionsexpressedreflectjudgmentsatthisdateandaresubjecttochangewithoutnotice.
Important:These disclosuresanddisclaimers mustbereadinconjunctionwiththeresearchreportofwhichitformspart.Receiptanduseof theresearch
reportissubjecttoallaspectsofthesedisclosuresanddisclaimers.Additionalinformationabouttheissuersandsecuritiesdiscussedinthisresearchreportis
availableonrequest.
Certifications:Theresearchanalyst(s)whopreparedthisresearchreportherebycertifiesthattheviewsexpressedinthisresearchreportaccuratelyreflectthe
researchanalystspersonalviewsaboutallofthesubjectissuersand/orsecurities,thattheanalyst(s)havenoknownconflictofinterestandnopartofthe
researchanalystscompensationwas,is,orwillbe,directlyorindirectly,relatedtothespecificviewsorrecommendationscontainedinthisresearchreport.
AdditionalDisclosuresofInterest:
UnlessspecificallymentionedinPointNo.9below:
1. TheResearchAnalyst(s),PCIL,oritsassociatesorrelativesoftheResearchAnalystdoesnothaveanyfinancialinterestinthecompany(ies)coveredin
thisreport.
2. TheResearchAnalyst,PCILoritsassociatesorrelativesoftheResearchAnalystaffiliatescollectivelydonotholdmorethan1%ofthesecuritiesofthe
company(ies)coveredinthisreportasoftheendofthemonthimmediatelyprecedingthedistributionoftheresearchreport.
3. TheResearchAnalyst,his/herassociate,his/herrelative,andPCIL,donothaveanyothermaterialconflictofinterestatthetimeofpublicationofthis
researchreport.
4. TheResearchAnalyst,PCIL,anditsassociateshavenotreceivedcompensationforinvestmentbankingormerchantbankingorbrokerageservicesorfor
anyotherproductsorservicesfromthecompany(ies)coveredinthisreport,inthepasttwelvemonths.
5. TheResearchAnalyst,PCILoritsassociateshavenotmanagedorcomanagedintheprevioustwelvemonths,aprivateorpublicofferingofsecuritiesfor
thecompany(ies)coveredinthisreport.
6. PCIL or its associates have not received compensation or other benefits from the company(ies) covered in this report or from any third party, in
connectionwiththeresearchreport.
7. TheResearchAnalysthasnotservedasanOfficer,Director,oremployeeofthecompany(ies)coveredintheResearchreport.
8. TheResearchAnalystandPCILhasnotbeenengagedinmarketmakingactivityforthecompany(ies)coveredintheResearchreport.
9. DetailsofPCIL,ResearchAnalystanditsassociatespertainingtothecompaniescoveredintheResearchreport:

Sr.no. Particulars Yes/No

1 Whether compensation has been received from the company(ies) covered in the Research report in the past 12 months for No
investmentbankingtransactionbyPCIL
2 WhetherResearchAnalyst,PCILoritsassociatesorrelativesoftheResearchAnalystaffiliatescollectivelyholdmorethan1%ofthe No
company(ies)coveredintheResearchreport
3 WhethercompensationhasbeenreceivedbyPCILoritsassociatesfromthecompany(ies)coveredintheResearchreport No
4 PCIL or its affiliates have managed or comanaged in the previous twelve months a private or public offering of securities for the No
company(ies)coveredintheResearchreport
5 ResearchAnalyst, hisassociate,PCILoritsassociateshavereceived compensationforinvestmentbankingormerchantbankingor No
brokerage services or for any other products or services from the company(ies) covered in the Research report, in the lasttwelve
months

Independence: PhillipCapital (India) Pvt. Ltd. has not had an investment banking relationship with, and has not received any compensation for investment
banking services from, the subject issuers in the past twelve (12) months, and PhillipCapital (India) Pvt. Ltd does not anticipate receiving or intend to seek
compensationforinvestmentbankingservicesfromthesubjectissuersinthenextthree(3)months.PhillipCapital(India)Pvt.Ltdisnotamarketmakerinthe
securitiesmentionedinthisresearchreport,althoughit,oritsaffiliates/employees,mayhavepositionsin,purchaseorsell,orbemateriallyinterestedinany
ofthesecuritiescoveredinthereport.
Suitability and Risks: This research report is for informational purposes only and is not tailored to the specific investment objectives, financial situation or
particularrequirementsofanyindividualrecipienthereof.Certainsecuritiesmaygiverisetosubstantialrisksandmaynotbesuitableforcertaininvestors.
Eachinvestormustmakeitsowndeterminationastotheappropriatenessofanysecuritiesreferredtointhisresearchreportbaseduponthelegal,taxand
accountingconsiderationsapplicabletosuchinvestoranditsowninvestmentobjectivesorstrategy,itsfinancialsituationanditsinvestingexperience.The
value of any security may be positively or adversely affected by changes in foreign exchange or interest rates, as well as by other financial, economic, or
politicalfactors.Pastperformanceisnotnecessarilyindicativeoffutureperformanceorresults.

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SPECIALTYCHEMICALINVESTORSDAY KEYTAKEAWAYS

Sources,CompletenessandAccuracy:ThematerialhereinisbaseduponinformationobtainedfromsourcesthatPCIPLandtheresearchanalystbelievetobe
reliable,butneitherPCIPLnortheresearchanalystrepresentsorguaranteesthattheinformationcontainedhereinisaccurateorcompleteanditshouldnot
berelieduponassuch.Opinionsexpressedhereinarecurrentopinionsasofthedateappearingonthismaterial,andaresubjecttochangewithoutnotice.
Furthermore,PCIPLisundernoobligationtoupdateorkeeptheinformationcurrent.Withoutlimitinganyoftheforegoing,innoeventshallPCIL,anyofits
affiliates/employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind
includingbutnotlimitedtoanydirectorconsequentiallossordamage,howeverarising,fromtheuseofthisdocument.
Copyright: The copyright in this research report belongs exclusively to PCIPL. All rights are reserved. Any unauthorised use or disclosure is prohibited. No
reprintingorreproduction,inwholeorinpart,ispermittedwithoutthePCIPLspriorconsent,exceptthatarecipientmayreprintitforinternalcirculationonly
andonlyifitisreprintedinitsentirety.
Caution:Riskoflossintrading/investmentcanbesubstantialandevenmorethantheamount/margingivenbyyou.Therecipientshouldcarefullyconsider
whether trading/investment is appropriate for the recipient in light of the recipients experience, objectives, financial resources and other relevant
circumstances.PCIPLandanyofitsemployees,directors,associates,groupentities,oraffiliatesshallnotbeliableforlosses,ifany,incurredbytherecipient.
Therecipientisfurthercautionedthattrading/investmentsinfinancialmarketsaresubjecttomarketrisksandareadvisedtoseektrading/investmentadvice
before investing. There is no guarantee/assurance as to returns or profits or capital protection or appreciation. PCIPL and any of its employees, directors,
associates, group entities, affiliates are not inducing the recipient for trading/investing in the financial market(s). Trading/Investment decision is the sole
responsibilityoftherecipient.
ForU.S.personsonly:ThisresearchreportisaproductofPhillipCapital(India)PvtLtd.,whichistheemployeroftheresearchanalyst(s)whohaspreparedthe
researchreport.Theresearchanalyst(s)preparingtheresearchreportis/areresidentoutsidetheUnitedStates(U.S.)andarenotassociatedpersonsofany
U.S.regulated brokerdealer and therefore the analyst(s) is/are not subject to supervision by a U.S. brokerdealer, and is/are not required to satisfy the
regulatorylicensingrequirementsofFINRAorrequiredtootherwisecomplywithU.S.rulesorregulationsregarding,amongotherthings,communicationswith
asubjectcompany,publicappearances,andtradingsecuritiesheldbyaresearchanalystaccount.
This report is intended for distribution by PhillipCapital (India) Pvt Ltd. only to "Major Institutional Investors" as defined by Rule 15a6(b)(4) of the U.S.
SecuritiesandExchangeAct,1934(theExchangeAct)andinterpretationsthereofbytheU.S.SecuritiesandExchangeCommission(SEC)inrelianceonRule15a
6(a)(2).IftherecipientofthisreportisnotaMajorInstitutionalInvestorasspecifiedabove,thenitshouldnotactuponthisreportandreturnthesametothe
sender.Further,thisreportmaynotbecopied,duplicated,and/ortransmittedonwardtoanyU.S.person,whichisnotaMajorInstitutionalInvestor.

InrelianceontheexemptionfromregistrationprovidedbyRule15a6oftheExchangeActandinterpretationsthereofbytheSECinordertoconductcertain
businesswithMajorInstitutionalInvestors,PhillipCapital(India)PvtLtd.hasenteredintoanagreementwithaU.S.registeredbrokerdealer,Decker&Co,LLC.
TransactionsinsecuritiesdiscussedinthisresearchreportshouldbeeffectedthroughDecker&Co,LLCoranotherU.S.registeredbrokerdealer.

IfDistributionistoAustralianInvestors
ThisreportisproducedbyPhillipCapital(India)PvtLtdandisbeingdistributedinAustraliabyPhillipCapitalLimited(AustralianFinancialServicesLicenceNo.
246827).

Thisreportcontainsgeneralsecuritiesadviceanddoesnottakeintoaccountyourpersonalobjectives,situationandneeds.PleasereadtheDisclosuresand
Disclaimerssetoutabove.Byreceivingorreadingthisreport,youagreetobeboundbythetermsandlimitationssetoutabove.Anyfailuretocomplywith
these terms and limitations may constitute a violation of law. This report has been provided to you for personal use only and shall not be reproduced,
distributedorpublishedbyyouinwholeorinpart,foranypurpose.Ifyouhavereceivedthisreportbymistake,pleasedeleteordestroyit,andnotifythe
senderimmediately.

PhillipCapital(India)Pvt.Ltd.
Registeredoffice:No.1,18thFloor,UrmiEstate,95GanpatraoKadamMarg,LowerParelWest,Mumbai400013

SURYA

Digitally signed by SURYA

NARAYAN PATRA
DN: c=IN, o=Personal , CID -

NARAYAN 3574740, postalCode=400705,

st=Maharashtra, cn=SURYA
NARAYAN PATRA

PATRA Date: 2016.10.03 19:50:03

+05'30'

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