Did you know that, knowingly or unknowingly, we use chemicals every day?
Well, it would not be wrong to say that chemicals have become an integral part of our daily lives.
Chemicals permeate every aspect of our lives, from food and clothing to medicine and electronics. Hence, being an investor, this is the right time for you to start investing in chemical stocks.
In this guide, we are going to tell you everything that you need to know about chemical stocks. Including the factors that you should consider while investing in them.
Moreover, we will also highlight the best chemical stocks to buy in 2023. As well as the top chemical sector smallcases for you to consider.
So, let’s dive in!
What are Chemical Stocks?
Chemical stocks refer to the shares of companies that are involved in the chemical industry. The chemical industry is a vast and diverse industry. It produces a wide range of products, including basic chemicals and speciality chemicals.
Speciality chemicals, on the other hand, are higher value-added products used in specific applications, such as electronic chemicals, paints and coatings, and personal care products.
Cyclical Nature of Indian Chemical Sector Stocks
The chemical industry is known for its highly cyclical nature, which sometimes can impact the performance of chemical shares. The demand for chemicals is closely tied to global economic conditions, with the industry experiencing periods of growth and contraction in line with economic cycles.
During periods of economic expansion, demand for chemicals tends to increase as industries such as construction, automotive, and consumer goods experience growth. On the other hand, during economic downturns, demand for chemicals tends to decline as industries cut back on production and inventory levels.
However, here’s an interesting fact that even during the economic downturn (from 2016-2019), the Indian chemical industry maintained a whopping CAGR of 17%. This simply implies that during difficult times, maybe industries could cut back their production to some extent, but since they produce essentials, their chances of going bust are almost negligible.
Moreover, the cyclical nature of the chemical industry may lead to volatility in pricing and demand, which can impact the performance of chemical companies and the chemical share price. Hence, if you plan to invest in the best chemical share, conducting thorough research and analysis is important before making investment decisions.
Well, to make your research more effective, we have compiled several factors that you should consider before investing in chemical sector stocks.
So, let’s check them out!
List of Best Chemical Stocks in India – Top Chemical Sector Share List
Some chemical companies enjoy strong competitive advantages due to their proprietary technologies, distribution networks, and brand recognition.
You can find the top chemical stocks list below:
|Popular Chemical Stocks in India||Market Cap||Stock Price|
|Super Crop Safe||₹20 Cr||₹8.21|
|Ganesh Benzoplast||₹985 Cr||₹172.55|
|Chemfab Alkalies||₹449 Cr||₹365.9|
|Jayant Agro Organics||₹510 Cr||₹204.7|
|Jyoti Resins & Adhesives||₹1,693 Cr||₹1,534.15|
|Balaji Amines||₹6,994 Cr||₹2,226.8|
|Thirumalai Chemicals||₹1,872 Cr||₹229.35|
|Meghmani Organics||₹2,093 Cr||₹83.7|
|Deepak Nitrite||₹28,295 Cr||₹2,226.05|
|Growel Ltd||₹2,680 Cr||₹137.45|
Some of the best penny stocks in chemical sector are:
- Aether Industries
- Jayshree Chemicals
- Par Drugs and Chemicals.
Note: The data is from 29th August, 2023. However, for real-time updates on stock prices and market trends, visit smallcase stocks collection today!
Top Chemical Companies in India (Top 3)
Here is the overview of the best chemical companies in India:
- Super Crop Safe: Super Crop Safe is a leading manufacturer of crop protection products in India. It is one of the top 10 chemical companies in India. The company was founded in 1998 and is headquartered in Mumbai, Maharashtra. Super Crop Safe offers a wide range of crop protection products, including pesticides, herbicides, and fungicides. The company’s products are used by farmers all over India to protect their crops from pests, diseases, commodity chemicals and weeds.
- Ganesh Benzoplast: Ganesh Benzoplast is a leading manufacturer of plastics and chemicals in India. The company was founded in 1972 and is headquartered in Mumbai, Maharashtra. Ganesh Benzoplast offers a wide range of plastics and chemicals, including PVC, PP, PE, commodity chemical, and ABS. The company’s products are used in a variety of industries, including automotive, packaging, and construction.
- Chemfab Alkalies: Chemfab Alkalies is a leading a specialty chemical company in India. The company was founded in 1976 and is headquartered in Mumbai, Maharashtra. Chemfab Alkalies offers a wide range of alkalies and specialty chemicals, including caustic soda, soda ash, and chlorine. The company’s products are used in a variety of industries, including pulp and paper, textiles, and pharmaceuticals. It is considered as on of the best specialty chemicals company in India.
Why invest in individual stocks when you have ready-made portfolios to invest in?
Ready-made portfolios to invest in?
Yes, you heard it right! Gone are the days when you needed to put in all the effort yourself. From researching to buying the stocks to building your portfolio and then doing all the rebalancing yourself.
Today, you have modern investment products like smallcases that help you build your low-cost, long-term portfolio. These smallcases are created and managed by professionals, and they are ready-made.
Want to Invest in the chemical sector smallcase?
Here is the popular chemicals sector smallcase that you can consider:
This smallcase was created by Windmill Capital when they realized the hidden potential of chemical industries.
Speciality Chemicals smallcase by Windmill Capital
Speciality Chemicals comprises businesses that produce speciality chemicals used in various sectors, including the automotive, pharmaceutical, textile, food processing, and agrochemical industries.
These companies have a strong market position, competitive advantages, and a track record of steady growth. Apart from this, they focus on innovation and advanced technologies, with the potential to drive future growth.
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade portfolio of stocks/ETFs, that are based on a theme idea or strategy.
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- smallcase.com offers over 200+ stock portfolios, created by 180+ managers.
- Some of the popular smallcases among new investors are as follows:
Disclosures for aforementioned smallcases
Future of Chemical Industry in India
The future of chemical shares in India looks promising. The industry is expected to experience steady growth in the coming years. India is home to a large and diverse chemical industry. Companies operate in various sub-sectors, here, such as basic chemicals, speciality chemicals, and agrochemicals.
The country’s growing population, rising urbanisation, and increasing disposable income levels are expected to drive demand for various chemical products. This includes fertilizers, plastics, paints, and coatings. Additionally, the Indian government’s focus on infrastructure development, renewable energy, and agricultural growth is expected to drive demand for chemicals in related sectors.
The Indian chemical industry is also becoming increasingly competitive. Companies are investing in research and development, technology upgrades, and partnerships to drive growth and innovation.
As a result, investing in chemical industry stocks in India can provide attractive long-term growth opportunities. Especially for investors who are willing to navigate through the cyclical nature of the industry. They should also carefully evaluate individual companies’ financial performance and growth prospects.
Factors to consider before investing in chemical stocks
1) Market conditions: Before investing in the best chemical sector stocks, it is important to analyze the current market conditions. Hence, keep a close eye on global demand, geopolitical issues, and regulatory changes that could impact the top chemical share price.
2) Technological developments: Technology is rapidly changing the chemical sector, with new innovations emerging all the time. Therefore, before investing, ensure that the companies you are considering invest enough time in R&D to stay ahead of the curve.
3) 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.
4) Environmental and social responsibility: Chemicals that are harmful to the planet are harmful to humankind as well. Hence, while investing in top chemical sector stocks, it is important to consider whether the companies you are planning to invest in are following sustainable practices or not.
5) 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, chemical share price, and debt levels to determine whether they are financially stable and have a strong potential for growth.
Benefits of Investing in Chemical Stocks
Investing in chemical stocks can provide investors with various advantages, such as:
- Diverse Investment Opportunities: The chemical industry is expansive and diverse, encompassing specialty chemicals, agrochemicals, petrochemicals, and more. This diversity offers investors a wide range of choices aligned with their risk tolerance and investment goals.
- Global Exposure: Many chemical companies operate internationally, enabling investors to access global markets and potentially benefit from worldwide economic growth.
- Consistent Demand: Chemicals are essential in numerous sectors, including agriculture, automotive, construction, and healthcare. This constant and often non-cyclical demand can bring stability to chemical stocks, even during economic downturns.
- Dividend Payments: Several chemical companies have a history of distributing dividends to shareholders. These dividends can serve as a reliable income source for investors.
- Innovation and Research: The chemical industry is renowned for its continuous innovation and research efforts. Investing in companies at the forefront of technological advancements can lead to long-term capital appreciation.
To Wrap It Up…
The chemical industry is expected to experience steady growth in the coming years. Hence, investing in chemical sector stocks can provide some attractive wealth-creation opportunities.
However, before making any final investment decisions, carefully evaluate market conditions and individual companies’ performance.
Moreover, you can also save your time and effort by investing in ready-made smallcases. And to begin your investment journey with smallcase, all you need to do is:
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These 3 are among the best in the chemical industry in India. The 3 best chemical stocks in India are:
– Super Crop Safe
– Ganesh Benzoplast
– Chemfab Alkalies
You can invest in chemical sector stocks via:
– Stock Market
– Mutual Funds
– Direct Stock Purchase Plans (DSPs)
Well, this decision completely depends on your financial goals and market conditions. Research the sector’s current performance and consider diversification and your investment horizon. You can also consult with a financial advisor for personalized advice.
People who can invest in chemical sector stocks include:
– Long-Term Investors
– Income-Oriented Investors
– Risk-Averse Investors
– Value Investors
– Research-Oriented Investors
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