What kind of margin pressure specialty chemical companies are facing?

Debasis Mohapatra

Bengaluru, 12 April 2026

Specialty chemical companies are expected to face margin squeeze in the short-term as petroleum derivative products see a sharp price rise owing to the Middle East conflict.

According to brokerage firm, Prabhudas Lilladher Capital (PL Capital); significant margin uncertainty has crept in among Indian specialty chemical companies for the next few months.

“The sharp spike in input costs from the conflict is expected to cause a slight sequential margin decline in Q4FY26. If the war persists, companies.. will face significant margin disruptions in Q1FY27 due to prolonged supply chain issues and elevated energy prices,” PL Capital said in a note.

Post the inception of US-Iran war there has been a sharp increase in key input prices. Though peace talks between Iran & the US raised hopes over the weekend, no deal between the two countries has again created uncertainty about crude oil prices in the days ahead.

Source: PL Capital

The brokerage firm, however, noted that the anti-dumping duty could provide some relief to Indian chemical companies.

“The potential imposition of anti-dumping duties (ADD) could provide meaningful relief to Indian chemical companies. NOCIL is expected to benefit from duties on several key products. Other companies such as Vinati Organics, Laxmi Organics, Gujarat Fluorochemicals, Deepak Nitrite, and SRF are also likely to gain from the implementation of ADD on key products,” the research note said.

Meanwhile, exports to Middle East countries have been affected due to the ongoing conflict.

“Companies exporting to the Middle East are expected to face added headwinds, with no shipments to the region in the final month of the quarter and elevated freight costs are expected to further erode margins if the war continues,” the PL Capital report said.

(This is for educational purposes only. Please consult your financial advisor before investing)