Best Chemical Stocks in India for March 2025 – 5Y CAGR Basis: Deepak Fertilisers, Linde India & More

India’s chemical industry is a well-diversified sector encompassing speciality chemicals, bulk chemicals, petrochemicals, agrochemicals, polymers, and fertilizers. As of August 2024, India ranks as the 6th largest chemical producer globally and 3rd in Asia, contributing 7% to the country’s GDP.

For investors looking at this growing sector, this article highlights the best chemical stocks in India for March 2025, based on key financial metrics such as five-year compound annual growth rate (CAGR), market capitalization, and net profit margin.

Best Chemical Stocks in March 2025 – Based on 5yr CAGR

Note: The best chemical stocks list provided here is as of March 03, 2025. The stocks are selected from the Nifty 500 universe, 1-yr returns are set to positive and sorted as per their 5-yr CAGR. 

Overview of the 5 Best Chemical Stocks in March 2025

1. Deepak Frtlsrs and Ptrchmcls Corp Ltd

Founded in 1979 by Chimanlal Mehta, Deepak Fertilisers and Petrochemicals Corporation Ltd. (DFPCL) manufactures fertilizers, industrial chemicals, and petrochemicals. Its diverse portfolio includes ammonia, nitric acid, technical ammonium nitrate, iso-propyl alcohol, and value-added real estate ventures.

Deepak Fertilisers & Petrochemicals posted a net profit of ₹251 crore in Q3 FY25, up 335.6% YoY. Revenue surged 39.2% to ₹2,579 crore, while EBITDA rose 72% to ₹489 crore, reflecting strong operational performance.

Key metrics:

• Earning per share (EPS): ₹27.78
• Return on equity (ROE): 10.83%

2. Linde India Ltd

Linde India, a subsidiary of Linde plc, specialises in industrial and medical gases like oxygen, nitrogen, and hydrogen. Established in 1935, it has a strong nationwide presence, offering gas distribution, project engineering, and large-scale air separation solutions.

Linde India reported a 14.2% decline in revenue to ₹606 crore, while EBITDA rose 3.2% to ₹192 crore. EBITDA margin improved to 31.7%, but net profit dropped 3.1% to ₹116 crore year-on-year.

Key metrics:

• EPS: ₹50.92
• ROE: 12.24%

3. Himadri Speciality Chemical Ltd

Himadri Speciality Chemical Ltd. (HSCL), India’s largest coal tar pitch producer, manufactures specialty chemicals for industries like lithium-ion batteries, defense, and construction. Established in 1987, HSCL operates in India, China, and Hong Kong, with BSE/NSE listings.

Himadri Speciality Chemical reported a 30.5% YoY rise in net profit to ₹142.06 crore, with revenue up 8.4% at ₹1,140.66 crore. Expenses grew 3.75%, while carbon materials revenue increased 8.38% to ₹1,134.50 crore.

Key metrics:

• EPS: ₹10.42
• ROE: 15.43%

4. Solar Industries India Ltd

Solar Industries is a major domestic producer of bulk and cartridge explosives, detonators, and detonating cords for mining, infrastructure, and construction. It also manufactures high-energy explosives, delivery systems, ammunition filling, and pyros fuses for the defence sector.

Solar Industries posted a 54.85% YoY rise in net profit to ₹314.87 crore for Q3 FY25. Revenue surged 38% to ₹1,973.08 crore, while EBITDA jumped 48% YoY to ₹527 crore, reflecting strong operational performance.

Key metrics:

• EPS: ₹83.49
• ROE: 28.50%

5. PCBL Chemical Ltd

PCBL Chemical Ltd, part of RP-Sanjiv Goenka Group, is India’s largest carbon black producer, serving the tire, plastics, and coatings industries. With multiple plants nationwide, the company is expanding into speciality chemicals and sustainable green power generation.

PCBL Chemical Ltd posted a 39.1% YoY decline in net profit to ₹93.1 crore in Q3 FY25, despite a 21.3% rise in revenue to ₹2,010 crore. EBITDA grew 13.7% to ₹317.4 crore.

Key metrics:

• EPS: ₹13.11
• ROE: 12.86%

Best Chemical Stock in March 2025 Based on Market Cap

Note: The best chemical stocks list here is as of March 03, 2025. The stocks are sorted based on the market cap from the Nifty 500 universe.

Best Solar Stocks in March 2025- Based on Net Profit Margin

Note: The best chemical stocks list here is as of March 03, 2025. The stocks are sorted based on the net profit margin from the Nifty 500 universe. 

Key Factors to Consider Before Investing in Chemical Stocks in India

The chemical industry in India has demonstrated resilience and substantial growth over the years, outperforming many other sectors. However, investing in chemical stocks requires careful analysis of various factors that impact their profitability and long-term sustainability. Here are key aspects investors should consider before making investment decisions.

1. Technological Advancements

The chemical sector is highly dependent on innovation. Investors should evaluate whether companies are prioritizing research and development to stay competitive in the evolving market. Technological advancements enhance efficiency, product quality, and overall business sustainability.

2. Raw Material Costs and Availability

Chemical companies rely on raw materials such as crude oil and natural gas. Any fluctuations in these commodities’ prices directly impact profitability. Investors should assess how well a company manages cost variations and secures a stable supply of raw materials to ensure steady production.

3. Market Conditions and Global Impact

Factors like global demand, geopolitical tensions, and regulatory policies significantly influence the chemical sector. Trade restrictions, export-import policies, and shifts in consumer demand can affect stock performance. Monitoring these trends is crucial before investing.

4. Impact of De-Inventorisation

Over the past quarters, several chemical firms have faced margin squeezes due to global de-inventorisation, leading to price pressures. Investors should focus on companies that remain unaffected by these challenges and continue to maintain stable pricing power.

5. Supply Chain Resilience

A strong supply chain is essential for the chemical industry, given its complexity. Issues such as transportation disruptions, geopolitical risks, and unexpected bottlenecks can affect operations. Investors should consider companies with robust and well-diversified supply chains to minimize risks.

6. Company Financial Health

Before investing in chemical stocks, examining a company’s financial stability is crucial. Key indicators include revenue growth, earnings per share (EPS), debt levels, and stock performance. A financially strong company is more likely to withstand economic downturns and market fluctuations.

Should You Invest in Chemical Stocks?

The chemical sector has consistently shown growth potential, making it an attractive long-term investment option. 

However, risks such as market volatility, regulatory challenges, and environmental concerns persist. 

Thorough research and a clear understanding of individual financial goals and risk appetite are essential before making investment decisions.

Conclusion

Investing in chemical stocks can be profitable, but due diligence is necessary. Considering the factors mentioned above will help investors make informed choices. Seeking expert financial advice can further mitigate risks and enhance investment success in the chemical sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.