Introduction:
The chemical industry plays a crucial role in the Indian economy. It provides vital raw materials and finished goods to diverse end-users, including those involved in agriculture, pharmaceuticals, textiles, construction, and automotive. With substantial growth potential supported by robust domestic and international demand and government backing, the chemical industry stands as an appealing investment opportunity.
This article explores the overview of the chemical industry in India and some top chemical stocks you can add to your portfolio in 2024. Keep reading.
India’s chemical industry – An overview
India's chemical industry is one of the fastest-growing sectors. It is poised to become the next global hub for chemical manufacturing. Companies involved in chemical manufacturing and processing have surpassed their counterparts in other sectors, exceeding shareholders' expectations.
As per a report by McKenzie, India’s chemical industry is anticipated to grow at a Compound Annual Growth Rate (CAGR) of 11 to 12% as against the global predictions of 7 to 8%. Furthermore, the Indian chemical industry is anticipated to witness a threefold increase in its global market share by the year 2040.
Top chemical stocks to invest in India in 2024
If you’re planning to invest in Indian chemical stocks but are confused about which stocks to pick, you’re on the right page. Below is the list of top chemical stocks in India you can add to your portfolio in 2024.
1. Reliance Industries Limited (RIL)
Reliance Industries Limited (RIL) is one of the behemoths in the Indian chemical industry. With a diversified portfolio that includes petrochemicals, refining, and speciality chemicals, RIL stands tall as a vital player in this sector. The company's commitment to innovation and sustainable practices positions it well for future growth.
As of 5 March 2024, RIL’s shares were trading for Rs. 3,002.25 per share at the National Stock Exchange (NSE) and Rs. 3,000.10 per share at the Bombay Stock Exchange (BSE). The stock has recently breached the 52-week high mark and is currently trading above its short-term and long-term moving averages.
2. Pidilite Industries Limited
Pidilite Industries is a leading player in adhesives, sealants, and construction chemicals. The company has demonstrated resilience and consistent growth over the years. The company is best known for its near-monopoly in the adhesive market, particularly with a flagship brand “Fevicol”.
As of 5 March 2024, Pidilite Industries’ shares were trading for Rs. 2,698.85 per share at the NSE and Rs. 2,696.10 per share at the BSE. The stock has zoomed by more than 7% in the last month and is approaching its 52-week high mark.
3. Aarti Industries Limited
Aarti Industries Limited is a leading player in the speciality chemicals segment, providing products to diverse industries such as pharmaceuticals, agrochemicals, and polymers. The company's strong focus on research and development, coupled with a global presence, positions it as a growth-oriented stock in the chemical sector.
As of 5 March 2024, Aarti Industries’ shares were trading for Rs. 662.00 per share at the NSE and Rs. 661.90 per share at the BSE. The one-year return of the stock stood at 20.36%.
4. UPL Limited
UPL Limited is one of the largest chemical manufacturing companies in India. Originally known for its presence in the agrochemical sector, the company has recently acquired significant stakes in the chemical industry.
As of 5 March 2024, UPL Limited’s shares were trading for Rs. 474.50 at the NSE and Rs. 474.35 per share at the BSE. Although the stock has fallen in the last few quarters, the company is poised for growth in the future.
5. Deepak Nitrite Limited
Deepak Nitrite is a Gujarat-based chemical manufacturing company. The product portfolio comprises a range of agrochemicals, colourants, and speciality chemicals. Although the stock has felt pressure in recent times, the improving book value makes it an attractive investment proposition. As of 5 March 2024, Deepak Nitrite’s shares were trading for Rs. 2,203.00 at the NSE and Rs. 2,202.35 per share at the BSE.
To conclude
Investing in chemical stocks in India in 2024 holds immense potential, driven by factors such as increased industrialisation, government initiatives, and global demand for specialised chemicals. However, as with any investment, it's crucial to conduct thorough research, assess risk factors, and stay updated on market trends. The companies mentioned above represent a snapshot of the diverse opportunities in the Indian chemical sector.
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