Best Chemical Stocks in India for September 2024 – 5yr CAGR Basis

India’s chemical industry, encompassing over 80,000 commercial products, is highly diversified and includes bulk chemicals, speciality chemicals, agrochemicals, petrochemicals, polymers, and fertilisers. Ranking as the 6th largest chemical producer globally and 3rd in Asia, it contributes 7% to India’s GDP. Valued at approximately USD 220 billion in 2022, the sector is expected to grow to USD 300 billion by 2025 and reach USD 1 trillion by 2040.

The growth in demand from end-user industries, which includes food processing, home care and personal care, is driving the expansion of various segments within India’s speciality chemicals market. Indian speciality chemical companies are increasing their capacities to meet the increasing demand both internationally and domestically. In this article, check the top 10 chemical stocks in India for September 2024, based on their 5-yr CAGR, and understand the sector’s growth prospects.

Best Chemicals Stocks in September 2024 – 5yr CAGR Basis

Note: The best chemical stocks list provided here is as of September 5, 2024. The stocks are picked from the Nifty 500 universe and sorted as per their 5-yr CAGR.

Overview of 5 Best Chemicals Stocks in India

1. Fertilisers And Chemicals Travancore Ltd

Fertilisers And Chemicals Travancore Ltd (FACT) is involved in the manufacturing and selling of fertilisers, its by-products and caprolactam. The company is under the administrative control of the Department of Fertilizers, Ministry of Chemicals & Fertilizers, Government of India. For FY 2024, the company reported a total income of ₹5,25,804 lakh, down from ₹6,33,372 lakh in FY 2023. The company’s profit was ₹14,611 lakh in FY 2024, compared to ₹61,283 lakh in FY 2023.

Key Metrics:

• Return on Equity (ROE): 63.33%
• Return on Capital Employed (ROCE): 19.23%

2. Linde India Ltd

Linde India Limited is mainly involved in the manufacturing of industrial and medical gasses and the construction of cryogenic and non-cryogenic air separation plants. For FY 2024, the company reported a total income of ₹28,456.81 million, compared to ₹32,394.94 million in 15 months ended March 31, 2023. The company’s profit was ₹4,340.86 million in FY 2024, compared to ₹5,380.59 million in 15 months ended March 31, 2023.

Key Metrics:

• ROE: 13.14%
• ROCE: 15.53%

3. Deepak Fertilisers and Petrochemicals Corp Ltd

Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) is one of the leading producers of fertilisers and industrial chemicals in India. For FY 2024, the company reported a total income of ₹2,12,181 lakh, compared to ₹2,48,386 lakh in FY 2023. The company’s profit was ₹31,337 lakh in FY 2024, up from ₹29,134 lakh in FY 2023.

Key Metrics:

• ROE: 8.32%
• ROCE: 12.32%

4. Deepak Nitrite Ltd

Deepak Nitrite manufactures chemical intermediates to serve the domestic and international markets. For FY 2024, the company reported a total income of ₹7,757.93 crore, compared to ₹8,019.64 crore in FY 2023. The company’s profit was ₹810.89 crore in FY 2024, down from ₹852 crore in FY 2023.

Key Metrics:

• ROE: 18.20%
• ROCE: 21.04%

5. Solar Industries India Ltd

Solar Industries is one of the major domestic producers of bulk and cartridge explosives, detonators, detonating cords, and components used in the mining, infrastructure, and construction sectors. For FY 2024, the company reported a total income of ₹3,775.86 crore, compared to ₹4,218.09 crore in FY 2023. The company’s profit was ₹596.30 crore in FY 2024, up from ₹445.39 crore in FY 2023.

Key Metrics:

• ROE: 27.06%
• ROCE: 31.18%

Chemicals Sector Growth in India

India’s chemical sector, valued at approximately USD 220 billion in 2022, is expected to expand to USD 1 trillion by 2040. The industry’s demand is expected to grow at an annual rate of 9% by 2025, with the sector contributing USD 383 billion to India’s GDP by 2030.

Specialty chemicals, representing 20% of the global chemical industry’s USD 4 trillion market, are forecasted to reach USD 64 billion in India by 2025, growing at a CAGR of 12%. The Indian chemical industry is expected to grow at a CAGR of 11-12% until 2027, increasing India’s share of the global speciality chemicals market from 3% to 4%. From April 2023 to March 2024, exports of organic chemicals totalled USD 7.54 billion, while inorganic chemicals exports reached USD 2.02 billion.

Conclusion

Apart from these, several other chemical sector stocks in India are contributing to the sector’s growth. Before investing in any stock, make sure to research the sector and the company’s financial growth. Talk to a financial advisor before investing.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.