New Delhi, Aug. 20 -- Profit gains recorded by several Indian chemical companies in the first quarter are likely to moderate in the second quarter as firms begin using costlier raw materials, while weak demand remains a key concern, according to Kotak Institutional Equities.

The brokerage said many companies likely exhausted their low-cost inventories during Q1FY27 and will now have to procure raw materials at higher prices. This is expected to put pressure on margins in Q2FY27, ANI reported.

However, supply disruptions linked to the Middle East conflict could keep prices and margins elevated in some chemical segments, including phenol, for longer, Kotak noted.

Q1 Gains Driven by Prices and Inventories

Several chemical intermediate pr...