Chemicals are an essential part of modern life, be it the cosmetics we use, the fertilizers that nourish the soil, or the pesticides that keep weeds away from farm produce. Chemical companies manufacture chemicals on a large scale to meet the growing global demand for chemicals.
Chemical companies produce and sell chemicals and related products. In fact, chemicals are ancillary products. Chemical companies operate across segments such as specialty chemicals, agricultural and allied chemicals, as well as machine and vehicle lubricants. From raw material suppliers to finished product manufacturers, top chemical stocks and companies play a vital role across multiple value chains.
Several chemical manufacturers are listed on Indian stock exchanges, which gives investors a good opportunity to invest in the chemical sector and get exposure to chemical sector stocks. This blog post will discuss the best chemical sector stocks listed on the National Stock Exchange (NSE). Read on to learn more about them and the chemical industry in India in general.
Chemical industry in India: A brief overview
The Indian chemical industry, which comprises home-grown chemical companies and subsidiaries of global chemical giants, is a prominent player in global chemical manufacturing. The sector contributes 7% to India’s GDP. For perspective, India is the world’s sixth-largest producer of chemicals and the third-largest in Asia. The domestic chemical sector is worth US$220 billion and is anticipated to expand to US$300 billion by 2030 and a whopping US$1 trillion by 2040. Additionally, the demand for chemical products is expected to expand by 9% per annum by 2025.
The Indian chemical industry is very well diversified, manufacturing over 80,000 products. Indian chemicals can be broadly classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, and polymers. The industry remains an active hub of opportunities, even in an environment of global uncertainty.
The Indian chemical industry caters to domestic and global requirements, making chemical sector stocks good investment options. We have listed the best chemical stocks by market capitalization. These stocks are a rare combination of high market capitalization and strong investment returns.
Top 10 chemical stocks in India in 2024 as per market capitalization
Here are the top 10 chemical stocks in India sorted by market capitalization.
| No | Name | Market Cap in Rs. Cr | P/E Ratio | Dividend Yield | 1-year return |
| 1 | Pidilite Industries Ltd | 1,66,256 | 88.5 | 0.49 % | 30.84 % |
| 2 | SRF Ltd | 73,734 | 60 | 0.29% | 4.56 % |
| 3 | Linde India Ltd | 64,855 | 148 | 0.05% | 26.95 % |
| 4 | Gujarat Fluorochemicals Ltd | 46,507 | 136 | 0.07% | 34.21% |
| 5 | Godrej Industries Ltd | 40,528 | 82.6 | 0.00% | 117.58 % |
| 6 | Deepak Nitrite Ltd | 39,877 | 49.5 | 0.26 % | 29.9 % |
| 7 | BASF India Ltd | 28,851 | 43.6 | 0.22 % | 142.15 % |
| 8 | Himadri Speciality Chemical Ltd | 27,771 | 62.1 | 0.09% | 142.39 % |
| 9 | Tata Chemicals Ltd | 26,817 | 34.6 | 1.43 % | -0.88 % |
| 10 | Castrol India Ltd | 25,549 | 28.9 | 2.90 % | 75.72 % |
Overview of the top 5 best chemical stocks in India by market capitalization
1. Pidilite Industries Ltd
Pidilite Industries Limited is a leading manufacturer of adhesives and sealants, construction chemicals, craftsmen products, DIY products, and polymer emulsions in India. Most of these products have been developed through strong in-house R&D.
Pidilite’s brand Fevicol has become synonymous with adhesives to millions of Indians and is ranked among the most trusted brands in the country. Some of the company’s other major brands are M-Seal, Fevikwik, Fevistik, Roff, Dr. Fixit, Fevicryl, Motomax, Hobby Ideas, and Araldite.
2. SRF Ltd
SRF Limited, a multi-business chemicals conglomerate, manufactures industrial and specialty intermediates. The diversified managed chemicals firm was once a single-unit manufacturer of tire cords. Founded in 1970 with its headquarters in Gurugram, India, the firm’s first plant was built in 1974 in Manali, Chennai.
SRF sells its solutions and offerings globally with multiple segments and applications. Some of these are tires, mines, air conditioners, household appliances, automotive, food packaging, and pharmaceutical raw materials.
3. Linde India Ltd
Linde India Limited, a member of Linde Plc., is a leading global industrial gases and engineering company in India, with sales of $31 billion. The company is engaged in the manufacturing of industrial and medical gases and the construction of cryogenic and non-cryogenic air separation plants.
The firm owns and operates 33 production facilities and filling stations, including India’s largest air separation plant at Jamshedpur.
4. Gujarat Fluorochemicals Ltd
Gujarat Fluorochemicals Ltd. is a leading producer of fluoro-polymers, fluoro-specialties, chemicals, and refrigerants in India. It is one of the top five global players in the fluoropolymers market, with exports to Europe, the Americas, Japan, and Asia.
5. Godrej Industries Ltd
Godrej Industries Limited is one of the Godrej Group’s holding companies. Its businesses comprise Chemicals, Estate Management, and Finance & Investments.
The firm’s Chemical Division manufactures and markets a wide range of oleochemical products derived from organic materials. The product portfolio under the Chemicals Division includes Fatty Alcohols, Fatty Acids, Surfactants, Glycerine, and Specialty Products. These products are used as raw materials in the home and personal care, pharmaceutical, and food industries. It is one of the leading manufacturers of oleo-chemicals on a standalone basis.
6. Deepak Nitrite Ltd
Deepak Nitrite, a company operating in the Indian chemicals sector, serves several business segments. It has a portfolio of more than 100 products, including agrochemicals, wood preservatives, dyes and pigments, pharmaceuticals, personal care, and petrochemicals.
The company has been a leading sodium nitrite and sodium nitrate producer in India since 1972. Since 2018, it is also the largest producer of phenol and acetone in India. In products like cuisines, oximes, and xylidines, the firm is among the world’s top 3 players.
7. BASF India Ltd
BASF India Limited is a leading transnational company in the Indian chemical industry. The company’s portfolio is organized into 6 segments: Agricultural Solutions, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Chemicals. It has products for crop protection, performance chemicals, dispersions and pigments, care chemicals, nutrition and health products, intermediates, petrochemicals, monomers, coatings, construction chemicals, performance materials, and process catalysts.
8. Himadri Speciality Chemical Ltd
Himadri Speciality Chemical is primarily engaged in the manufacturing of carbon materials and chemicals. It is India’s No.1 coal pitch manufacturer and the only company to manufacture advanced carbon materials in India. It is also the largest manufacturer of naphthalene and SNF in India.
9. Tata Chemicals Ltd
Tata Chemicals, the Tata group’s flagship chemical and fertilizers company, has a presence across Africa, North America, Asia, and Europe.
Tata Chemicals started with industrial soda ash and salt and is currently the third-largest global producer of soda ash and has the largest saltworks in Asia. The firm’s 13 manufacturing plants and soda ash facilities are located in the US, the UK, Kenya, and India. The company offers essential chemical products such as sodium bicarbonate and soda ash to glass manufacturers, detergent manufacturers, and other industrial plants worldwide.
10. Castrol India Ltd
Castrol India is one of the leading producers of oil, greases, lubricants, and other automotive-related products. Its product range includes engine oils, brake fluids, and axle lubricants. Some of the company’s brands are Castrol CRB, Castrol Activ, and Castrol GTX.
Factors to consider before investing in chemical stocks in India
The chemical sector is flourishing in India, which provides a good investment opportunity as a growing sector can deliver good returns on your investments. However, investors would do well to keep a few things in mind before investing in chemical sector stocks.
Technological Advancements
Chemical production pollutes the environment. As India moves toward carbon neutrality, chemical sector companies have been forced to adopt newer, technologically advanced production techniques to reduce emissions. Therefore, reading up on the company’s progress in reducing emissions is important before you invest in the stock.
Market Conditions
Indian chemical manufacturers have global exposure as they export chemical products to countries across the world. Thus, wars and geopolitical changes can impact the Indian chemical sector.
Competition
The chemical sector is highly competitive, with many large players vying for market share. So, before investing, research the competition and analyze the competitive advantage of the companies you are considering.
Company Financials
It is important to analyze the financial health of the chemical companies you are considering investing in. Look at their revenue growth, earnings per share, share price, and debt levels to determine whether they are financially stable and have a strong potential for growth.
Should you invest in chemical stocks?
The chemical industry has shown resilience in the face of recent market volatility, with eight of the top 10 chemical sector stocks by market capitalization delivering more than 20% return on investment in the past 1 year.
However, chemical sector companies are bound to face changes and make significant investments in technological advancements in the coming years as they prepare to reduce carbon emissions and pollution. These changes can pose company-specific challenges. Therefore, it is important to make researched, well-informed decisions.
Conclusion
The chemical sector has shown growth and resilience in the past few years. This makes chemical sector stocks good investments. But before considering investing in chemical sector stocks, do your research.
