Best Chemical Stocks in India

Best Chemical Stocks in India 2024 as per Analyst Ratings

The table below outlines the best chemical shares in India, sorted as per BUY analyst ratings provided by the I/B/E/S databases. We have chosen these ratings as a criterion because stock market analyst rate a stock after carefully examining the stock market and company performance.

Now, let’s explore the list-

Top Chemical Stocks in India in 2024 as per Market Capitalisation

Below are some of the top chemical stocks ranked by market capitalisation.

Overview of Best Chemical Stocks in India as per Analyst Ratings 

Here is a detailed overview of the stocks of top chemical companies in India as per analyst ratings:

1) Gujarat Fluorochemicals

Headquartered in Noida, Gujarat, Fluorochemicals Limited (GFL) is an Indian chemicals company with over 30 years of experience in Fluorine Chemistry.

GFL specialises in 4 segments - fluoropolymers, refrigerants, chemicals and speciality chemicals. The company’s fluoropolymer products include Polyvinylidene Fluoride (PVDF), Fluorine Kautschuk Material (FKM), Fluorinated Ethylene Propylene (FEP), Perfluoroalkoxy Alkanes (PFA) and more. Its refrigerant products consist of R22, R32, R407C and R410A.

GFL's chemical offerings include caustic soda, chlorine, hydrochloric acid, sodium hydrogen sulphate, carbon tetrachloride, hydrogen gas, fluorspar, etc. It also provides speciality chemicals that are HF-based, TFE-based, and KF-based. GFL caters products to industries such as automotive, aerospace, food, pharmaceuticals, and oil and gas. With offices in Mumbai, Vadodara, Egmore, and Noida, GFL serves customers all across the nation.

2) UPL

United Phosphorus Limited (UPL), headquartered in Mumbai, is a chemical company that creates and produces products to protect crops.

The company manufactures various seeds, such as corn, forages, sunflower, canola, rice, wheat, soya, and other crops. It also provides crop protection by producing herbicides, insecticides, acaricides, adjuvants, fungicides, and seed treatments for various uses. 

Moreover, UPL also offers services to farmers like advisory solutions, training and retail services. It also provides grain storage, food storage, and remote storage monitoring services. The company is engaged with brands like Pacific Seeds, Alta Seeds and Hannaford. United Phosphorus Limited has around 43 manufacturing facilities and 18 R&D facilities. 

3) SRF

Incorporated in 1970, SRF had its first plant in Manali. From initially manufacturing only tyre cords in a single unit, the company has evolved into a prominent and diversified chemicals enterprise.

The company provides products and services to various sectors, including automotive, chemicals, agrochemicals, technical textiles, pharmaceuticals, food and agro, mining, renewable energy, advertising, manufacturing, refrigeration, air conditioning, FMCG, and more. 

SRF provides a range of products, including tyre technical textiles, laminated fabrics, belting fabrics, coated fabrics, cord fabrics, industrial yarns, fluorochemicals, speciality chemicals, engineering plastics, and packaging films.

The company sells its products under various brands such as Dymel, Petlar, Oplar, Floron, Tufbet, Shakti, and Tufnyl. SRF is present in more than 90 countries and has 14 manufacturing plants in around four countries.

4) Navin Fluorine International

Navin Fluorine International Limited is an Indian company specialising in fluorine chemistry, particularly in the production of inorganic fluorides, refrigerants and speciality fluorochemicals.

The company's inorganic fluoride segment consists of potassium fluoride, ammonium bifluoride, potassium fluoroborate, hexafluorophosphoric acid, potassium fluorotitanate and sodium fluoride.

This segment caters to industries like stainless steel, oil and gas, abrasives, electronics, solar energy, pharmaceuticals and agrochemicals. Its refrigerant segment caters to various end-use industries, including window and split room air conditioners, chillers, packaged air conditioners, etc. 

It manufactures specialty fluorochemicals and products for various segments, including pharmaceuticals, crop protection, hydrocarbons, and fragrances. Additionally, Navin Fluorine International Limited provides contract research and manufacturing services. Its manufacturing facilities are located in Surat, Gujarat, and Dewas, Madhya Pradesh. 

5) Clean Science and Technology

Established in 2003, Clean Science and Technology Limited (CSTL) is a fine and specialty chemical manufacturing company. The company produces vital ingredients used daily in the agricultural, cosmetic, aroma, and food industries.

Its product segment is divided into three: performance chemicals, FMCG chemicals, and pharma and agro intermediaries. The performance chemicals section comprises Tertiary Butyl Hydroquinone​ and Dimethyl Sebacate (DMS). 

Factors to Consider Before Investing in Chemical Stocks in India

Here are some of the factors that you must keep in mind before investing in the chemical sector stocks:

• Technological Advancements

Stay updated on developments in technology within the chemical industry. Ensure that the companies you are interested in prioritise research and development to stay competitive.

• Raw Material 

Changes in crude oil, natural gas, and other raw material prices can directly affect the profitability of chemical companies. The availability and cost of raw materials significantly influence the profitability and competitiveness of the Indian speciality chemicals industry.

• Market Conditions

Keep an eye on the global demand, geopolitical issues and regulatory changes affecting chemical stocks. Analyse how these factors could impact the stock prices of the top chemical companies.

• De-inventorisation

Over the past quarters, several domestic chemical players have experienced margin squeezes. Keep an eye out for the specific stocks unaffected by recent global market challenges such as de-inventorization among chemical companies, which has led to price pressures worldwide.

• Supply Chain

The chemical industry has a complex supply chain. Various factors like transportation costs, geopolitical tensions, or any unexpected problems can affect a company’s supply chain. Therefore, you should invest in companies that have resilient supply chains. 

• Company Financials

Examine the financial health performance of chemical companies. You must check the company’s revenue growth, stock prices, earnings per share and debt levels to understand its stability and growth potential.

Should You Invest in Chemical Stocks?

Chemical stocks provide an opportunity for long-term capital growth since the industry has shown resilience and growth in recent years. It has outperformed many other sectors in the last decade. However, it is significant to note that the sector is posed with risks like market volatility, regulatory changes, environmental concerns and company-specific challenges.

To make informed investment decisions in chemical stocks, thorough research is necessary. Therefore, you must consider your financial goals and risk appetite before including the best chemical stocks in your investment portfolio.

The Bottom Line 

When considering investment in chemical sector stocks, it is in your best interest to take into account the aforementioned factors.

Remember, while the chemical sector holds promise for sustained long-term growth, there are potential drawbacks. Therefore, make sure to conduct your due diligence or seek advice from a financial expert before making investment decisions.