Over the years, the Indian chemical industry has gone through a major surge being one of the largest producers in the world. Due to the dynamism of this industry, many investors have been taking interest in this sector.
From 2014 to 2023, Indian companies in the chemical sector posted a 20% annual growth in shareholder returns. Meanwhile, international players lagged with only a 6% rise. This stark difference underscores the exceptional momentum and resilience within India’s chemical sector, setting it apart on the world stage.
Despite being a growing industry, not every company associated with the chemical industry can maximise its ROI or Return on Investment. In the following section, let’s explore India’s flourishing chemical sector and the potential it presents.
Chemical industry overview
In 2023, this market reached a valuation of $220 billion (₹18.3 lakh crore), with projections aiming for $383 billion (₹31.8 lakh crore) by 2030, supported by a projected 8.1% annual growth.
On the global stage, India ranks sixth in total sales and plays a pivotal role in exports, making up 12% of the nation’s outbound trade. As a major producer of dyes and agricultural inputs, it supplies approximately 16% of global dye requirements. Its proximity to the Middle East, a critical source of raw petrochemical materials, provides cost and logistics advantages.
Government support through policies like 100% foreign direct investment (excluding certain hazardous items) and the development of dedicated industrial regions (Petroleum, Chemical, and Petrochemical Investment Regions/ PCPIRs) boosts infrastructure and growth.
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Top chemical stocks in India 2024
With over 80,000 distinct products, India’s chemical landscape is vast and varied. From agricultural inputs to specialised compounds and petroleum derivatives, each segment serves diverse, targeted markets with unique demands.
As of November 7-2024, India’s top chemical stocks are ranked here according to their market capitalisation. While these figures highlight dominant players in the sector, they are not forecasts of future growth or performance.
Note: These stocks have been picked up based on the investors’ choices among the agrochemicals, specialty chemicals, and petrochemicals
Pidilite Industries leads several businesses. They lead in adhesives, sealants, and paint products. Best known for its Fevicol brand, it services consumer as well as industrial markets and has a strong presence in India and internationally.
- Market cap: ₹1,61,253 crore
- Revenue: ₹11332.52 crore as of March 2024
- Profit after tax or PAT: ₹1799.470 crore as of March-2024
- Volatility: 52-Weeks High: 3415.00 (30 Sep’24) , Low: 2418.00 (15 Nov’23)
SRF specialises in packaging films, refrigerants, and specialty chemicals. It has a global reach and robust R&D, catering to industries such as medicines and automobiles. The business manufactures goods for a variety of industries. This covers goods related to automobiles, medications, and textiles. SRF has established itself as a pioneer in its area thanks to its dedication to research and development and unwavering push for innovation.
- Market cap: ₹69,910 crore
- Revenue: ₹10906.09 crore as of March-2024
- PAT: ₹1374.03 crore as of March 2024
- Volatility: 52-Weeks High: 2693.95 (3 May’24) , Low: 2089.10 (4 Jun’24)
The company holds a significant position in both the chemical and gas industries, providing essential elements like oxygen, hydrogen & nitrogen. These resources cater to multiple fields, including production, healthcare, food services etc..
- Market cap: ₹67,073 crore
- Revenue: ₹2845.68 crore as of March 2024
- PAT: ₹426.33 crore as of March-2024
- Volatility: 52-Weeks High: 9935.05 (22 May’24), Low: 5325.00 (18 Jan’24)
The company is the market leader in fluorochemicals. It manufactures refrigerants, solvents, and specialised chemicals. Renowned globally, the company produces hydrofluoric acid, a critical compound with wide-reaching applications. They are important players in the chemicals and industrial gases sector.
- Market cap: ₹47,736 crore
- Revenue: ₹4136 crore as of March-2024
- PAT: ₹418.7 crore as of March-2024
- Volatility: 52-Weeks High: 4880.95 (17 Oct’24), Low: 2476.00 (4 Jun’24)
This listed company is a major producer of industrial chemicals & intermediates. They specialise in the production of specialty chemicals, dyes, and agrochemicals. The company’s products serve many sectors, spanning pharma, textiles, automotive & agriculture. Known for its strong focus on sustainable practices, Deepak Nitrite also distinguishes itself through advanced R&D capabilities.
- Market cap: ₹38,720 crore
- Revenue: ₹2848 crore as of March 2024
- PAT: ₹433.43 crore as of March-2024
- Volatility: 52-Weeks High: 3169.00 (1 Aug’24), Low: 2021.00 (4 Jun’24)
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Bottomline
We’ve highlighted some top picks in the chemical industry for 2024. Yet, this sector is vast, with numerous other possibilities worth exploring. Before committing funds, ensure you have a clear grasp of the specifics and understand your own tolerance for risk.
Further reading: Automobile industry in India
FAQs
- What Are Chemical Stocks?
Shares in firms involved in producing chemicals for diverse sectors fall into this category. These companies manufacture items like industrial gases, specialty compounds, agro-based products, and petroleum derivatives. Their outputs serve crucial areas such as agriculture, healthcare, and industrial manufacturing. Investing here can be complex, as performance often hinges on raw material costs, regulatory standards, and international demand. Though they offer growth possibilities, such shares can also be affected by economic shifts and environmental rules.
- Why should I invest in top chemical stocks in India?
In addition to being one of the most economically contributing industries in the Indian market, the chemical sector is also among the fastest-growing industries. Stocks of the companies that come under the chemical sector also demonstrate positive growth potential and exposure to a key sector that caters to a varying level of customers—from households to industries.
- What are the best chemical stocks to invest in India?
We’ve discussed the best chemical stocks in India for 2024, which include Pidilite Industries, SRF Ltd, Linde India, Gujarat Fluorochemicals, and Deepak Nitrite. But, as mentioned, numerous other low-key stocks can be the next potential earner for you, generating massive returns and lower risks.
- What factors influence the performance of chemical stocks in India?
The performance of the stocks is influenced by a plethora of variables. The unique market variabilities that mostly affect the chemical industry, include raw material prices, government regulations, market demands, global market conditions, and innovation in the related sectors.
- What are the risks of investing in chemical stocks?
As with any other stock, chemical stocks also have some risk involved when investing. These include volatility in raw material prices (for example: crude oil for petrochemicals), environmental regulations, competition from domestic and international suppliers, demand for end-use products, and geopolitical factors like war and supply chain issues.
