About Chemical Sector
With the coverage of over 80,000 commercial products, India's chemical industry is extremely diversified. It can be classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilisers. With a 7% GDP contribution, India is 3rd largest chemical producer in Asia and 6th in the world as of August 2023.
The development of various segments in the specialty chemicals market in India is being driven by the increasing demand from end-user industries, including food processing, personal care, and home care.
Future Outlook of The Chemical Sector
In 2019, the Indian chemicals industry stood at US$ 178 billion, and it is likely to reach US$ 304 billion by 2025, reflecting a CAGR of 9.3%. In addition, the demand for chemicals and petrochemicals in India is likely to nearly triple and reach US$ 1 trillion by 2040.
The specialty chemicals companies in India are focused on expanding their capacities to meet the rising demand from domestic and overseas customers. India's chemical industry has the potential to grow significantly as international businesses want to reduce the risk in their China-dependent supply chains.
Things To Consider Before Investing In The Chemical Sector
Investing in the chemical sector stocks can be lucrative, but it's essential to conduct thorough research and consider various factors before making investment decisions. Here are some key considerations:
- Industry Overview: Understand the chemical industry's overall health, growth prospects, and trends. Analyse the demand for chemicals in various sectors such as agriculture, manufacturing, and consumer goods.
- Economic Conditions: Economic conditions can significantly impact the chemical sector. A growing economy often leads to increased demand for chemicals.
- Regulatory Environment: Chemical companies are subject to various regulations, including environmental and safety standards. Assess the impact of existing and potential regulations on the company's operations and costs.
- Competitive Landscape: Evaluate the competitive positioning of the chemical company within the industry. Consider market share, product differentiation, and the company's ability to innovate.
- Supply Chain and Raw Materials: Understand the company's supply chain, including sources of raw materials and any potential vulnerabilities. Monitor the prices and availability of key raw materials as they can impact the company's profitability.
- Financial Health: Examine the company's financial statements, including revenue, earnings, and cash flow. In addition, you should evaluate the company's debt levels and overall financial stability.
- Global Presence: Companies with a global presence may be exposed to various economic conditions and currency risks. Evaluate the geographic diversification of the company's operations.
- Environmental, Social, and Governance (ESG) Factors: Consider the company's stance on environmental sustainability, social responsibility, and corporate governance. ESG factors can have an impact on the company's reputation and long-term viability.
How To Invest In The Chemical Sector Stocks?
To invest in sector stocks via Angel One, follow these steps:
- Log in to your Angel One account.
- Click on the search icon and look for your desired chemical sector stock.
- Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
- To complete your transaction, click on the ‘Buy’ button.
You can track the status of the purchase from the ‘Positions’ section in the ‘Orders’ module. Once the stock is delivered, you can track its gains and losses from your ‘Portfolio.’
