In this article, let’s look at 10 such top chemical stocks & companies that are setting up facilities and investing heavily & The development of a nation’s industrial and agricultural sectors depends heavily on its chemical industry. In addition, it supplies raw materials for many downstream industries, including papers, paints, textiles, soaps, detergents, and more.
Depending on their uses and efficacy, speciality chemicals may be used alone or in combination with several other chemicals to contribute to the creation of any product effectively.
Additionally, this industry serves a significant variety of final-use application industries and encompasses 80,000+ products. The Middle East is the world’s primary source of petrochemical feedstock, and India’s proximity to this region allows for economic scale benefits.
In India, the chemical industry employs over 2 million people. Based on their use in the end-user industries, speciality chemicals can be further divided into various categories, including personal care materials, dyes and pigments, agrochemicals, polymer additives, water chemicals, textile chemicals, and application-driven segments etc.
India contributes roughly 16% of the world’s total production of dye-related products and dye intermediates, making it a significant global supplier of dyes. In addition, these products are crucial to many other industrial sectors, including textiles, food, cosmetics, agriculture, automotive, and aerospace.
Due to India’s high demand for chemical products, chemical stocks are also likely to rise. In addition, the middle-class population is swiftly growing, which significantly impacts the need for food, clothing, and transportation.
As a result of the end-user industry’s expansion driving the demand for speciality chemicals in the nation and boosting the share of Chemical Stocks, we have compiled a list top 10 chemical stocks in India in 2024 in this blog.
Diversifying an investor’s portfolio will lower risk exposure and increase profit potential. The Indian chemical platform has become very well-known internationally in recent years. The Indian chemical industry has grown and is now the focus of several other sectors, including agriculture, pharmaceuticals, food processing, and others. These chemical stocks & businesses have outperformed several industries.
Further, let us look at the best chemical stocks of 2024.
List of the 10 Best Chemical Stocks in India 2024
Following is a list of some of the best chemical stocks to buy –
| S.No. | Best Chemical Stocks in India |
| 1. | Super Crop Safe |
| 2. | Ganesh Benzoplast |
| 3. | Chemfab Alkalis |
| 4. | Jayant Agro-Organics |
| 5. | Jyoti Resins & Adhesives |
| 6. | Balaji Amines |
| 7. | Thirumalai Chemicals |
| 8. | Meghmani Organics |
| 9. | Deepak Nitrite |
| 10. | Grauer & Weil (India) |
The chemical sector of India has more than 80,000 products, which made it worth more than US$ 178 million in the year 2019. The Indian chemical sector holds a lot of potential and because of this, it is expected to cross US$ 304 billion by the end of 2025, with a CAGR of 9.3%.
Moreover, the country also has a strong foothold in the global import-export sector. It’s worth noting that India ranks 8th in imports and 14th in the case of exports at an international level. Moreover, our country is the 4th largest agrochemical producer in the world.
Here are the 6 key factors behind the growth of the Indian chemical industry:
Over the last year, companies in the chemical sector have undergone huge growth due to mass production as a result of the COVID-19 pandemic.
The speciality chemical industry of India has evolved into the biggest beneficiary in the supply chain by outperforming China. Moreover, the power crisis in China also played a big role in giving opportunities to Indian chemical manufacturers.
Increasing operational costs in China and environmental awareness also helped India outperform China.
Increasing demands from personal care and food processing industries.
Currency benefits due to appreciation of the Chinese currency and depreciation of the rupee against the USD.
Factors to Consider Before Investing in Chemical Stocks
- A High Level of Competition
When it comes to bulk, commodity, and integrated chemical stocks, an investor would observe that one company’s products are indistinguishable from those of another company. Because of this, a customer can quickly switch from chemicals made by one manufacturer to chemicals produced by another.
The producers of bulk/commodity/integrated chemicals face fierce competition due to the commoditization and lack of differentiation of their products, and they have no pricing influence over their clients.
In the market, they are price takers because the lowest-cost producer establishes the market price, and every other producer is obligated to match it to keep their customers from switching to the lowest-cost producer.
- The Economies of Scale Are High for Low-Cost Producers
As said in the above point, due to the non-differentiable nature of their products and the ease with which customers can switch suppliers, resource chemical stocks companies compete with one another on price.
The technology to produce common chemicals is also well-developed and widely accessible. Therefore, becoming the lowest-cost manufacturer on the market is the primary source of competitive advantage for any producer of commodity chemicals.
This is so that everyone can benefit in the long run because the lowest-cost producer establishes the market price, and everyone else must match it to succeed.
- Capital Intensity
As mentioned, commodity chemical stocks companies typically have a sizeable manufacturing facility to take advantage of economies of scale and run profitable operations. It is thought that a commodity or integrated chemical manufacturer must reach an actual minimum threshold before it can even be pertinent to its industry.
Therefore, being a top player where efficiencies of scale help to decrease the cost of manufacturing is crucial for the commodity chemical stocks & industry.
An investor would understand that a company operating in the commodity chemical sector must build a sizeable plant to maintain operations, necessitating a significant investment.
- Exhaustive Survey
An investor would understand that chemical producers—particularly the bulk chemical players—need to be highly cost-competitive to create stable profit margins. Earlier, we mentioned that businesses primarily use economies of scale to become low-cost manufacturers of bulk chemicals.
The competitive advantage that integration gives chemical stocks increases their profit margins. Because manufacturers can produce many intermediate products internally, shielding them from the volatility of these products’ open market prices, a higher level of integration also aids in lowering the volatility of their earnings. Especially for raw materials that do not see a lot of trading or are challenging to come by, integration of operations helps businesses avoid the risk of unavailability of raw materials.
Top Chemical Stocks in India: Overview
Here is a brief overview of some of the best chemical stocks in India-
1) Super Crop Safe
Super Crop Safe Limited was established as a private limited company in Gujarat on February 9, 1987, by the Companies Act 1956, to grow as a trading company.
On January 16, 1992, a special resolution was passed to change the company’s status. A new certificate of incorporation reflecting the name change was released by the Registrar of Companies, Gujarat, on March 20, 1992. The company began marketing a wide variety of pesticides created by M/S Super Industries, a member of its group. It is a renowned and one of the top chemical companies in India.
2) Ganesh Benzoplast
The business of providing climate-controlled storage facilities for bulk liquids and chemicals at different ports in India is carried out by the Indian company Ganesh Benzoplast Limited.
A variety of speciality chemicals, food preservatives, and industrial lubricants are produced and exported by the company. The Liquid Storage Terminal (LST) Division and Chemical Division are the two segments through which it operates.
3) Chemfab Alkalis
The first membrane cell plant to manufacture Chloralkali in India was built by Chemfab Alkalis Limited (CCAL), which has also established a long history of environmental responsibility and workplace diversity.
It is amongst the top 10 chemical companies in India. Also, one of the first significant chemical organizations in India to successfully introduce and implement novel technologies and maintain its leadership position is CCAL.
Since its inception, CCAL’s operations have benefited from significant investments in processes and quality improvement, keeping them at the forefront of technology.
4) Jayant Agro-Organics
Jayant Agro-Organics Limited was established in 2000. It has a fully modernised, cutting-edge technology castor seed crushing unit. The plant is situated in Banaskantha, one of Gujarat’s principal castor-growing regions, producing 75% of the country’s castor seed. The plant is conveniently connected because it is close to the Kandla Port, from which we export bulk oil, and is located on a state highway.
As a joint venture partner with Jayant Agro-Organics Limited in 2013, the multinational chemical company Arkema acquired a stake in Ihsedu Agrochem. The joint venture aims to produce different industrial and speciality grade castor oil.
5) Jyoti Resins & Adhesives
Founded in 1993, Jyoti Resins & Adhesives Ltd. is a renowned company that operates in the chemicals industry. One of Jyoti Resins & Adhesives Ltd.’s key product/revenue segments is wood adhesives. Hence, it is often a top choice in the chemical sector for numerous investors trading in the Indian chemical stocks market.
6) Balaji Amines
Balaji Amines Limited (BAL), one of India’s top producers of aliphatic amines, was founded in 1988 to meet the expanding demand for speciality chemicals with a higher perceived value.
In 1989, BAL started producing methylamines. Subsequently, it added factories to create ethylamine and other methylamine and ethylamine derivatives. As a result, BAL has consistently increased capacity and improved processes to give customers high-quality goods at the lowest possible prices.
Amine technology is a closely guarded process worldwide, with only a small number of companies having access to it. However, BAL tested an indigenously created technology for the first time in India and continued to develop it over time.
7) Thirumalai Chemicals
Public limited company Thirumalai Chemicals Limited was established in 1972, often considered one of the top chemical stocks.
Based on technology provided by Ch.F.Von Heyden and Davy Power Gas, Germany, it was established to manufacture PAN with an initial installed capacity of 7500 mts per year. In 1976, the plant started producing on a commercial scale.
8) Meghmani Organics
Gujarat Industries was founded as a partnership company in Gujarat to produce pigments in 1986.
By 1995, Gujarat Industries had become Meghmani Organics Limited, a joint stock company thanks to its high productivity and profitability. Since then, Meghmani Organics Limited has expanded its line of products to include various pesticides and other pigments.
Meghmani Organics Limited, a top producer of pesticide and pigment products in the nation, has won numerous prestigious honours for its exceptional commercial success.
9) Deepak Nitrite
Another company in India that manufactures chemicals is Deepak Nitrite Ltd. The company’s manufacturing facilities are in Hyderabad in Telangana, Roha and Taloja in Maharashtra and Nandesari and Dahej in Gujarat.
A wide range of chemicals, including agrochemicals, colourants, rubber, pharmaceuticals, speciality, and fine chemicals, are produced by Deepak Nitrite.
10) Grauer & Weil (India)
Grauer & Weil (India) Limited, also known as Growel, has been a trailblazer in the surface finishing industry. One of the few businesses in the world and the only one in India, Growel provides comprehensive corrosion protection solutions for all substrate types and business sectors.
In 2016, Growel became the first provider of surface finishing solutions in India to receive the AS 9100 certification.
Conclusion
India’s chemical stocks are increasing due to the growing demand for chemical goods. In addition, India is now concentrating on many chemical product consumers due to China’s ban on activities related to the chemical industry.
Due to the increase in market share both domestically and internationally, stockholders see good returns on their investments.
Hence, make sure to choose well-established businesses that offer solid returns when investing in the stocks of companies in the chemical stocks.
