Chemical companies swell investor's returns

The Indian chemical industry is the 3rd largest producer in Asia and 12th in the world. Indian government recognises the chemical industry as a key growth element of the economy. In the chemical sector, 100% FDI is permissible. The government had targeted to increase the share of manufacturing in GDP to atleast 25% by 2025 (from current 16%). Further, initiatives taken by the government, like tax and import duty reduction, Make in India and relaxation of environmental norms for chemical industry, will help the chemical industry to grow. Currently, Indian chemical industry is trading at a  P/E of 21x.

The chemical industry is sub divided into different categories: Chemicals, Fertilisers, Pesticides & Agrochemicals, Carbon Black and Dyes & Pigments.

We have analysed the companies who have given highest returns during last one month in different categories within the chemical industry.

In Chemicals segment, Mangalam Organics Ltd., Alufluoride Ltd., & Bhansali Engineering Polymers Ltd., have given highest returns of 49.06%, 45.32% & 45% respectively during last month.

In Fertilisers segment, National Fertilisers Ltd., Indra Industries Ltd., & Rashtriya Chemicals & Fertilisers Ltd., have given highest returns of 50.24%, 40.33% & 37.97% respectively during last month.

In Pesticides & Agrochemicals segment, Bharat Rasayan Ltd., & BASF India Ltd., have given highest returns of 23.79%  & 16.97% respectively during last month.

In Carbon Black segment, Phillips Carbon Black Ltd., has given highest return of 17.12% during last month.

In Dyes & Pigments segment, Organic Coatings Ltd., & Adi Rasayan Ltd., have given highest return of 23.16% & 19.74% respectively during last month.

The domestic chemical industry is expected to grow to $226 billion by 2020, Union Minister of State (independent charge) for Commerce and Industry Nirmala Sitharaman said while speaking to a leading English daily.