ICICI Securities Research Report on Archean Chemical Industries

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Bromine prices in China fell to a 15-year low in June 2023, but have since partially recovered. The price decline was due to a combination of factors, including greed, speculation, and a sudden drop in demand. China is currently destocking bromine, which could last until the end of 2023.

We believe that bromine producers are fundamentally sound investments, as China is heavily reliant on imports to meet its demand for bromine. This means that China cannot create overcapacity in the bromine market.

Archean Chemical’s (ACI) Q1 FY2024 results were relatively strong, despite the volatility in bromine prices. This was due to long-term contracts and strong performance in industrial salts.

We expect bromine prices to recover in the fourth quarter of fiscal year 2024 (Q4 FY24), but volume recovery is likely to take longer. ACI is also in the process of commissioning its derivative plant, which will increase earnings visibility in the coming years.


We maintain our buy rating on ACI with an unchanged target price of INR 750 (13x FY2025 earnings per share). The key risks to our investment thesis are:

  • Lower than expected bromine prices and volume recovery.
  • Delay in the commissioning of the bromine derivative plant.

Overall, we believe that ACI is a good investment for investors who are looking for exposure to the growing bromine market.

Here are some additional points that I would like to add to the article:

  • The bromine market is expected to grow at a CAGR of 5.8% from 2023 to 2025, driven by increasing demand from a variety of end-use industries, such as flame retardants, water treatment, and pharmaceuticals.
  • ACI is the largest bromine producer in India and has a strong export market. The company is also expanding its production capacity to meet growing demand.
  • The commissioning of the bromine derivative plant will help ACI to diversify its product portfolio and improve its margins.

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