Stock to buy for 35% upside: Why Archean Chemical is ICICI Securities' top speciality chemicals pick
ICICI Securities said Archean Chemical Industries remains its top pick in the speciality chemicals space, citing a favourable risk-reward profile and the potential recovery in its core business.
- Sep 2, 2026,
- Updated Sep 2, 2026 10:53 AM IST
ICICI Securities has maintained its 'Buy' rating on Archean Chemical Industries Ltd with a target price of Rs 655, implying an upside of 35 per cent from the current market price of Rs 485. The brokerage has raised its target from Rs 640 while retaining its valuation multiple of 16 times FY28E EBITDA for the core business.
ICICI Securities said Archean Chemical remains its top pick in the speciality chemicals space, citing a favourable risk-reward profile and the potential recovery in its core business. According to the brokerage, improvements in bromine production and the normalisation of bromine prices after three weak years could support earnings recovery. It also expects the salt business to improve in the second half of FY27, while the company's SOP and bromine derivative businesses could provide additional upside.
A key part of the brokerage's investment case is Archean Chemical's planned compound power semiconductor business. The company is in advanced stages of setting up a silicon carbide semiconductor fabrication and ATMP facility, which ICICI Securities expects to be the only integrated facility of its kind in India. The project has received approval under the India Semiconductor Mission, with an estimated project cost of USD 250 million. Archean Chemical has also partnered with Clas-SiC in the UK for fabrication technology, Aixtron for silicon carbide epitaxial film deposition equipment and IIT Bhubaneswar for silicon carbide crystal growth.
On the core business, ICICI Securities expects bromine production to recover, with the company targeting an annualised production run-rate of 20-24 kilotonnes at the end of FY27. The brokerage estimates bromine revenue to grow at a 37 per cent compounded annually and bromine EBITDA at a 42.5 per cent compounded annually over FY26-FY28.
ICICI Securities expects Archean Chemical's earnings to recover sharply from the second half of FY27, with EBITDA estimated to grow at a compounded annually of over 50 per cent between FY26 and FY28. Importantly, its current estimates do not assign any contribution from the power semiconductor business, which could begin generating revenue from FY29.
ICICI Securities has maintained its 'Buy' rating on Archean Chemical Industries Ltd with a target price of Rs 655, implying an upside of 35 per cent from the current market price of Rs 485. The brokerage has raised its target from Rs 640 while retaining its valuation multiple of 16 times FY28E EBITDA for the core business.
ICICI Securities said Archean Chemical remains its top pick in the speciality chemicals space, citing a favourable risk-reward profile and the potential recovery in its core business. According to the brokerage, improvements in bromine production and the normalisation of bromine prices after three weak years could support earnings recovery. It also expects the salt business to improve in the second half of FY27, while the company's SOP and bromine derivative businesses could provide additional upside.
A key part of the brokerage's investment case is Archean Chemical's planned compound power semiconductor business. The company is in advanced stages of setting up a silicon carbide semiconductor fabrication and ATMP facility, which ICICI Securities expects to be the only integrated facility of its kind in India. The project has received approval under the India Semiconductor Mission, with an estimated project cost of USD 250 million. Archean Chemical has also partnered with Clas-SiC in the UK for fabrication technology, Aixtron for silicon carbide epitaxial film deposition equipment and IIT Bhubaneswar for silicon carbide crystal growth.
On the core business, ICICI Securities expects bromine production to recover, with the company targeting an annualised production run-rate of 20-24 kilotonnes at the end of FY27. The brokerage estimates bromine revenue to grow at a 37 per cent compounded annually and bromine EBITDA at a 42.5 per cent compounded annually over FY26-FY28.
ICICI Securities expects Archean Chemical's earnings to recover sharply from the second half of FY27, with EBITDA estimated to grow at a compounded annually of over 50 per cent between FY26 and FY28. Importantly, its current estimates do not assign any contribution from the power semiconductor business, which could begin generating revenue from FY29.