Ashish Kacholia cuts stake in two chemical stocks after 114% rally. What’s driving the move?

Ace investor Ashish Kacholia, widely known for spotting emerging small-cap winners, has pared his holdings in two chemical stocks during the first quarter of FY27, locking in gains after the stocks delivered returns of up to 114% so far this year.

The latest shareholding data available on the BSE shows that Kacholia reduced his stake in Yasho Industries to 2.08% from 2.37% at the end of the March 2026 quarter. He also trimmed his holding in Finotex Chemicals to 2.06% from 2.60%, indicating a reduction of 0.54 percentage points during the quarter.

Yasho Industries’ stock price has delivered a staggering 114% return in 2026 while Fineotex Chemicals has risen 58% in the last six months.

Kacholia is among India’s most closely watched small-cap investors, with his portfolio moves often drawing significant attention from the market. Kacholia’s investment decisions are widely tracked by retail and institutional investors alike, as they are often seen as indicators of emerging opportunities and evolving market sentiment.

Also read: Ashish Kacholia’s picks: 12 stocks rally up to 130% in CY26, 3 turned multibaggers; 2 new Q4 bets

Kacholia, fondly called the ‘Big Whale’ by media, Kacholia started out with Prime Securities and later joined Edelweiss before incorporating his own broking firm, Lucky Securities in 1995. He co-founded Hungama Digital with Rakesh Jhunjhunwala in 1999 and started building his own portfolio from 2003.

As per the Trendlyne data, Ashish Kacholia publicly holds 50 stocks with a net worth of nearly Rs 3,000 crore crore.

Why is Kacholia selling chemical stocks?

Iran war supply constraints – In the fourth quarter last financial year, companies continued to face raw material shortages due to disruptions caused by the West Asia conflict.

India’s chemicals industry, primarily through higher crude oil prices and supply chain disruptions. As many chemical manufacturers rely on crude-derived feedstocks such as naphtha, benzene and methanol, elevated oil prices increase raw material costs and put pressure on profit margins. Disruptions around the Strait of Hormuz also raised freight and insurance costs while delaying shipments of key inputs. Although a weaker rupee may support export realisations, persistent geopolitical tensions and higher input costs are likely to outweigh the benefits, particularly for commodity and petrochemical-linked chemical companies.

Although raw material prices have eased since end-May and availability is gradually improving, JM Financial expects supply chain constraints to persist in the near term, with normalisation likely over the next one to two quarters.

Softening demand – JM also observed that discretionary demand has weakened due to higher prices, although non-discretionary demand remains stable. While pent-up demand could emerge once supply chains normalise, the brokerage believes chemical prices are unlikely to return to pre-conflict levels, supporting a healthier spreads environment for the industry.

Also read:Ashish Kacholia exits, Madhusudan Kela trims stake in smallcap NBFC stock that’s up over 50% in 2026

China’s muscle power – InCred Equities said China’s persistent capacity expansion continues to exert significant pressure on the global chemicals industry. It noted that Chinese producers, particularly in petrochemicals, intermediates and commodity chemicals, have added capacity well ahead of demand and are exporting surplus output at lower prices, forcing global competitors to either cut prices or lose market share.

The brokerage believes Indian chemical companies should leverage China’s cost advantage rather than compete directly in commoditised products. It noted that Indian specialty chemical manufacturers have traditionally imported key intermediates and raw materials from China, where production costs remain substantially lower. InCred said the opportunity lies in moving downstream into higher-value products such as specialty chemicals, formulations, pharma intermediates, agrochemical formulations, food additives, electronic chemicals and customised CDMO products. It added that companies focused on differentiated, value-added offerings can benefit from lower Chinese input costs, while those remaining in commodity chemicals are likely to continue facing pricing and margin pressure.

Chemical stocks Q1 outlook – Axis Direct expects a mixed earnings performance for the chemicals and agrochemicals sector in Q1FY27. The brokerage said the delayed onset of the southwest monsoon pushed Kharif-related agrochemical demand into the second quarter, resulting in a relatively subdued quarter for domestic formulation companies.

At the same time, it expects companies with exposure to CDMO, fluorochemicals and refrigerants to outperform on the back of healthy order execution and a favourable product mix.

The brokerage believes pricing pressure from Chinese competition will continue to weigh on commoditised chemical manufacturers, limiting margin expansion. However, within the mid-cap universe, Axis expects companies supported by strong domestic infrastructure-linked order books to deliver healthy growth through robust execution, even as uncertainty persists in export markets.

Ashish Kacholia trims stake in NBFC

Shareholding data available on the BSE shows that Ashish Kacholia’s stake in NBFC SG Finserve fell below the 1% disclosure threshold from 2.37% at the end of the March 2026 quarter, indicating a likely exit.

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