The Indian Chemical industry is emerging as one of the significant pillars of the country’s economic growth. With a varying range of sub-sectors including specialty chemicals, agrochemicals, and petrochemicals, the very industry delves into global trades and domestic usage as well. In recent years, Chemical Stocks have significantly expanded due to increasing industrialization, urbanization, and an emerging middle-class consumer base.
The chemical industry provides raw materials for agriculture, pharmaceuticals, automotive, construction, and textiles. This industry contributes to 7% of India’s GDP. The country ranks third in Asia and sixth globally in chemical production. It is an ever-evolving industry to reach $300 billion by 2025.
The Indian Government is actively supporting the industry for its growth and development. The Department of Chemicals and Petrochemicals received a budget of $20.93 million in the Union budget 2023-24.
What are Chemical Stocks?
Chemical stocks are the company’s shares in agrochemicals, petrochemicals, dyes and pigments, pharmaceuticals, and basic chemicals. The Chemical Stocks and industry showcase a country’s internal strength as well as economic context. Here are the major reasons why one should invest in chemical stocks in India:
- Domestic demand: India is a developing country. Its growing economy highly demands raw materials for various industries. The chemical companies fulfill these demands.
- Robust Exports: India’s chemical units hold a prominent space in the global market. India is also a major exporter of many chemicals. Hence it can be a good choice to opt for chemical stocks.
- Government initiatives: The Government has introduced various schemes for establishing new chemical industries. The Make in India initiative also increased the growth of the chemical manufacturing sector which further increases the importance of chemical stocks.
- Diversify Portfolio: India’s chemical industry is quite diversified. It includes specialty chemicals, basic chemicals, pharmaceuticals, petrochemicals, and agrochemicals. This diversity allows investors to experience varying risks and growth.
- Resilient sector: Chemical shares provide long-term capital growth and opportunities. It has shown resilience and outperformed other sectors. This industry has shown healthy growth in the last decade.
List of Top Chemical Stocks in India
There are many chemical units across the country. Here are the details of the top Chemical Stocks in India:
| S. No. | Share Price | Mcap(In INR) | Share Price(In INR) |
|---|---|---|---|
| 1 | SRF Ltd | 71,176 Cr | 2392 |
| 2 | Deepak Nitrite | 36,661 Cr | 2700 |
| 3 | Tata Chemicals | 27,523 Cr | 1082 |
| 4 | Gujrat Fluorochemicals | 35,504 Cr | 3245 |
| 5 | Pidilite Industries | 1,57,610 Cr | 3113 |
| 6 | Navin Fluorine | 18,150 Cr | 3691 |
| 7 | Linde India | 76,871 Cr | 9049 |
1) SRF Limited
SRF Limited was founded in 1970. The company is headquartered in Gurugram, Haryana (India). It has a network of around 8,000 employees. SRF Ltd is spread across eleven manufacturing units in India, Thailand, Hungary, and South Africa.
The firm deals with and delivers a wide array of products and services spanning chemicals, polymers, and technical textiles. Their offerings serve industries such as packaging, electronics, automotive, and agriculture, emphasizing innovation, sustainability, and global reach.
Considering the last 5-year stock, SRF has delivered a significant return of 302.53%. Also, the ROE (Return On Equity) and Debt to Equity were 11.64% and 0.44. It has an EPS of 45.06. The yearly profit has shown a remarkable growth from 916 crores in 2020 to 2162 crores in 2023. However, There was a decrease in the year 2024 that made the net yearly profit to 1336 crores.
2) Deepak Nitrite
Deepak Nitrite, founded in 1970, is headquartered in Baroda, Gujarat (India). It has its manufacturing centers in Gujarat, Maharashtra, and Telangana.
Deepak Nitrite Limited offers a broad range of chemicals and intermediates for the pharmaceuticals, agrochemicals, and petrochemicals industries. Their portfolio includes basic, fine, and specialty chemicals, emphasizing quality, innovation, and sustainability to serve global markets effectively.
Considering the last 5-year stock, Deepak Nitrite has delivered a significant return of 780.24%. Also, the ROE (Return On Equity) and Debt to Equity were 16.91% and 0.06. It has an EPS of 59.45. The yearly profit has grown from 611 crores in 2020 to 852 crores in 2023. The current year’s net profit was approximately 810 crores till now.
3) Tata Chemicals
Tata Chemicals was established in 1939 and headquartered in Mumbai, Maharashtra (India). The company has operation centers in India, Europe, North America, and Africa.
TATA Chemicals provides a diverse range of products and services across various sectors. Specializing in chemicals, they offer solutions for agriculture, consumer products, industry, and energy storage. Their portfolio includes fertilizers, soda ash, sodium bicarbonate, and specialty chemicals, focusing on sustainability and innovation.
Considering the last 5-year stock, Tata Chemicals has delivered a significant return of 83.01%. Also, the ROE (Return On Equity) and Debt to Equity were 3.43% and 0.25. It has an EPS of 10.52. The yearly profit has grown from 10,668 crores in 2020 to 17007 crores in 2023. The current year’s net profit was approximately 15707 crores.
4) Gujarat Fluorochemicals
Gujarat Fluorochemicals was established in 1987. The company is based in Noida, Uttar Pradesh (India). Gujarat Fluorochemicals has two subsidiaries- Gujarat Fluorochemicals GmbH and Gujarat Fluorochemicals Americas LLC.
This company is involved in Refrigerant manufacturing. Its products are chloromethane, refrigerants, and polytetrafluoroethylene (PTFE).
Considering the last 5-year stock, Gujarat Fluorochemicals has delivered a significant return of 329.33%. Also, the ROE (Return On Equity) and Debt to Equity were 7.33% and 0.35. It has an EPS of 39.59. The yearly profit has grown from 189 crores in 2020 to 5857 crores in 2023.
5) Pidilite Industries
The Pidilite Industries was incorporated in 1959 and is based in Andheri, Mumbai (India). It has manufacturing units in Gujarat, Maharashtra, and Himachal Pradesh. It is a leading adhesive manufacturer in India.
Its most popular product ‘Fevicol’ dominates the market. Other brands include FeviKwik, Dr. Fixit, Roff, Cyclo, Ranipal, Hobby Ideas, M-Seal, and Acron. Additionally, it produces art materials, stationery, car products, pigments, textile resins, leather chemicals, and construction chemicals.
Considering the last 5-year stock, Pidilite Industries has delivered a significant return of 154.77%. Also, the ROE (Return On Equity) and Debt to Equity were 20.57% and 0.05. It has an EPS of 34.00. The yearly profit has grown from 928 crores in 2019 to 1289 crores in 2023. The firm has a net worth of 7446 crores as per the data stated in the year 2023.
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6) Navin Fluorine International Limited
It was incorporated in 1998. The company has its headquarters in Mumbai, Maharashtra (India). NFIL is spread across India in Gujarat and Madhya Pradesh. Its export market includes Europe, the USA, Southeast Asia, and Middle Eastern countries.
The Company engages in fluorine chemistry. It produces refrigerants, inorganic fluorides, and specialty organofluorides.
Considering the last 5-year stock, Navin Fluorine has delivered a significant return of 423.08%. Also, the ROE (Return On Equity) and Debt to Equity were 9.59% and 0.57. It has an EPS of 54.55. The yearly profit has grown from 147 crores in 2019 to 375 crores in 2023. Additionally, It had a net worth of 2185 crores in the year 2023.
7) Linde India Limited
Linde India Ltd. was established in 1987 and has a business office in Vadodara, Gujarat (India). Linde is a leading engineering and gas company serving over 100 countries. The company is based in Germany. Linde’s Indian subsidiary has more than 1200 employees.
This company delivers engineering and construction services to petrochemical plants, LNG, natural gas plants, ammonia plants, hydrogen & syntheses gas plants, liquid nitrogen wash plants, and air separation plants.
Considering the last 5-year stock, Linde India Ltd has delivered a significant return of 1637.59%. Also, the ROE (Return On Equity) and Debt to Equity were 12.52% and 0.01. It has an EPS of 50.90. The yearly profit has grown from 151 crores in 2020 to 538 crores in 2023.
Future Trends and Opportunities of Investing in Chemical Stocks
The chemical sector is evolving with time. It offers various opportunities for its investors driven by several factors:
- Specialty Chemicals: India’s chemical industry is shifting towards specialty chemicals due to good margins and global demand. These chemicals cater to diverse sectors such as pharmaceuticals, agrochemicals, and specialty coatings, offering potential growth.
- Environmental Sustainability: There’s a global push towards sustainability and environmental responsibility. Indian chemical companies that adopt cleaner technologies and focus on sustainability can outperform this trend and gain competitive advantages.
- Pharmaceuticals: The pharmaceutical sector is growing due to increasing healthcare expenditures and global demand for generics. Chemical companies supplying raw materials to this sector can see steady growth.
- Advancing technology: Adopting digital technologies in the chemical industry can enhance manufacturing processes and reduce costs for chemical companies.
Conclusion
The Indian chemical sector is one of the fastest-growing sectors. This diversity of chemical industries offers good opportunities for investors. By investing in these shares, investors can participate in India’s industrial growth and export potential. With increasing domestic demand and favorable government initiatives, the chemical sector is poised for significant expansion.
While considering a chemical stock, it is advisable to study the nuances of the sector. A good analysis of the market fluctuations and stock performance will help in making a smart choice.
