Best Chemical Stocks in October 2024 – Based on 5yr CAGR

With over 80,000 commercial products, India’s chemical industry is highly diverse. It can be categorised into bulk chemicals, speciality chemicals, agrochemicals, petrochemicals, polymers, and fertilizers. As the 6th largest chemical producer globally and the 3rd largest in Asia, it contributes 7% to India’s GDP. Currently valued at ~US$ 220 billion, the Indian chemical sector is projected to grow to US$ 300 billion by 2030 and US$ 1 trillion by 2040. In this article, check the top 10 chemical stocks in India for October 2024, evaluated based on their 5-yr CAGR.

10 Best Chemicals Stocks in India in October 2024 – 5yr CAGR Basis

Note: The best chemical stocks list provided here is as of October 7, 2024. The stocks are selected from the Nifty 500 universe and sorted as per their 5-yr CAGR. 

Overview of the 5 Best Chemical Stocks in October 2024

• Fertilisers And Chemicals Travancore Ltd

Fertilisers And Chemicals Travancore Ltd (FACT) is engaged 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, declined from ₹61,283 lakh in FY 2023.

Key Metrics:

• Return on Equity (ROE): 11.03%
• Return on Capital Employed (ROCE): 18.39%

• Linde India Ltd

Linde India Limited is primarily into 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%

• Deepak Fertilisers and Petrochemicals Corp Ltd

Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) stands amongst 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%

• Solar Industries India Ltd

Solar Industries Ltd is amongst the main 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 ₹6,113.99 crore, a slight decline from ₹6,954.05 crore in FY 2023. The company’s profit was ₹875.23 crore in FY 2024, up from ₹811.17 crore in FY 2023.

Key Metrics:

• ROE: 27.06%
• ROCE: 31.18%

• PCBL Ltd

PCBL Ltd, a part of the RP-Sanjiv Goenka Group, specialises in the production of carbon black and speciality chemicals, as well as generating electricity for captive consumption and selling surplus electricity to external buyers. For FY 2024, the company reported a total income of ₹6,456.80 crore, an increase from ₹5,814.67 crore in FY 2023. The company’s profit was ₹491.11 crore in FY 2024, up from ₹442.19 crore in FY 2023.

Key Metrics:

• ROE: 16.12%
• ROCE: 10.60%

Chemical Sector Growth in India

The Indian chemical industry is projected to grow at a CAGR of 11-12% by 2027, which will increase the country’s share in the global speciality chemicals market from 3% to 4%. 

By 2025, an estimated investment of ₹8 lakh crore (~US$ 107.38 billion) is anticipated in the Indian chemicals and petrochemicals sector. Speciality chemicals represent 20% of the global chemicals market, valued at US$ 4 trillion, with India’s market expected to grow at a CAGR of 12% to reach US$ 64 billion by 2025. This growth is expected to be fueled by strong demand in export and end-user industries, with a CAGR of 10-20%.

The Department of Chemicals & Petrochemicals plans to implement Production-Linked Incentives (PLI) in the chemical and petrochemical sectors and will revise the guidelines for the Petroleum, Chemicals, and Petrochemicals Investment Region (PCPIR). 

Despite the challenges posed by the pandemic, the Indian chemical industry has found several opportunities due to supply chain disruptions in China and trade tensions between the US, Europe, and China. Supportive measures, including fiscal incentives such as special provisions through PCPIRs or Special Economic Zones (SEZs) to promote downstream units, will further boost production and industry development. The PCPIR policy aims to establish dedicated integrated manufacturing hubs that will attract investments of ₹20 lakh crore (around US$ 276.46 billion) by 2035.

Conclusion 

In addition to the chemical sector stocks provided here, numerous other companies in India’s chemical sector are driving growth. It’s essential to conduct thorough research on both the industry and the financial performance of any company before making investment decisions. Consulting with a financial advisor can provide valuable insights and help you navigate the complexities of the market.

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.