Is Chemical Sector Ready For Next Bull Run ?

India's Global Market Share

• India is 6th largest chemical producer in entire world and 3rd largest chemical producer in entire Asia.
• But if we look at the global level market share India only has around 4% of total market share.
• China is the market leader in producing chemicals with total 40% of market share and after that US and EU ha around 15% of market share.
• Big opportunity of Indian producers also India is fast growing market.

Value of Chemicals

• There are 2 types of chemicals at Broder level like
• Simple Chemicals : Everyday, basic chemicals used widely (e.g., water, ammonia).
• Specialty Chemicals : Custom-made chemicals for special uses (e.g., cosmetics, drugs).
• Chemicals has massive use cases like it are used in various industries like : Agriculture, Healthcare, Construction, Textiles, Automotive, Food and Beverage, Energy, Electronics, Cosmetics and Personal Care, Paper and Packaging.

China vs India

• In 2017 to 2022 China saw a massive disruption in chemical sector.
• Like due to heavy pollution they cut down the production and stop carbon factories till further order.
• This benefit the Indian carbon companies like Rain Industries which stock got sky rocket.
• Here if you see clearly the stock suddenly got sky rocket.
• The earnings and margins also increases, But after China remove the ban the demand again surge towards China.

Why India

• As we seen above India is one of the highest growing market in both chemical and speciality chemicals sector.
• As we know the stock in chemical sectors have been in same range seens past few years.
• Eg : Check SRF chemical stock
• But if we read the conference call of the chemical companies we well notice that all of them are heavily investing in expansion and research and innovation.

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