Best Large Cap Chemical Stocks in India: The chemical industry is the very fabric of modern life. We don’t realize how these chemicals are used in most of the products of our daily lives. In this article, we will analyze a few big players in this industry and look into their performance.
Best Large Cap Chemical Stocks in India.
Best Large Cap Chemical Stocks in India #1: Pidilite Industries Ltd.
Pidilite Industries is in the business of consumer and specialty chemicals in India. It was established in 1959 with a single factory and manufactured only one product, “Fevicol”.
It manufactures products for small to large applications at home and in industry. Pidilite product portfolio includes adhesives, sealants, waterproofing solutions, and construction chemicals to arts & crafts, industrial resins, polymers, and more. Some famous brands are Fevicol, Fevicol Mr, Dr. Fixit, Fevikwik, Fevicryl, M-Seal, and Fevistik.
Pidilite has a presence in 71 countries with major subsidiaries in Brazil, Sri Lanka, Thailand, Egypt, Dubai, and Bangladesh. It has 8+ manufacturing units.
Data Source: Annual Report
The company’s financial report reported a 19% increase in revenue from operations from Rs.9920Cr in FY22 to Rs.11799 Cr in FY23. The net profit after tax increased by 7% from Rs.1207 Cr in FY22 to Rs.1289 Cr in FY23. The steep increase in interest rates and depressed demand conditions in the developed markets have affected the demand, especially for exports.
The 3-year average RoE and RoCE stand at 20.59% and 27.17% indicating the company is operating efficiently and generating good returns.
The Debt-equity ratio stands at 0.02 times and the interest coverage ratio at 37.17 times which means the company has the potential to borrow funds if required and doesn’t have much pressure for payment of interest.
The promoters hold 69.84% of shares as of Q3FY24 and this percentage has been more or less consistent in the last few years indicating a positive sign.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP (Rs) | 2,698.4 | Market Cap (Cr.) | 1,38,616 |
| Debt to Equity | 0.02 | Price to Book Value | 16.92 |
| EPS(TTM) | 29.6 | Stock P/E | 84.6 |
| PBIT Margin | 15.01% | Net Profit Margin | 10.92% |
| Promoter Holdings | 69.84% | FII Holdings | 11.49% |
| RoE | 20% | RoCE | 26.75% |
Best Large Cap Chemical Stocks In India #2: SRF Ltd
SRF was established in 1970 with its first plant in Manali, India as a tire cord manufacturer and evolved as a diversified chemical conglomerate.
SRF is a chemical-based entity engaged in the manufacturing of industrial and specialty intermediates that are used in varied applications and segments: from tires to air conditioners, mines to cricket grounds, automotive to household appliances, and food packaging to raw materials for pharmaceuticals. The main divisions are chemicals business (CB), packaging films business (PFB), technical textiles business (TTB), and others.
It exports to 90+ countries and has 14 plants in 4 countries – India, Thailand, South Africa, and Hungary.
Data Source: Annual Report
The Profit & loss statement of the company reported a 19% increase in revenue from operations from Rs.12434Cr in FY22 to Rs.14870 Cr in FY23. The net profit after tax increased by 14% from Rs.1889 Cr in FY22 to Rs.2162 Cr in FY23.
The 3-year average RoE and RoCE stand at 22.59% and 21.65% respectively, indicating the company is operating efficiently and performing well financially. The 3-year average net profit margin is 14.48%.
The Debt-equity ratio stands at 0.42 times and the interest coverage ratio at 14.79 times which means the company relies less on external borrowings and has the potential to borrow funds if required.
The promoters hold 50.53% of shares as of Q3 FY24, and this percentage has been more or less consistent in the last five years. FII holds 19.6% of shares indicating a positive sign as of Q3 FY24.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP (Rs) | 2,294.05 | Market Cap (Cr.) | 68,526 |
| EPS(TTM) | 58.48 | Stock P/E | 40.21 |
| RoE | 15.97% | RoCE | 15.84% |
| Promoter Holdings | 50.53% | FII Holdings | 19.60% |
| Debt to Equity | 0.42 | Price to Book Value | 6.42 |
| PBIT Margin | 20.09% | Net Profit Margin | 14.54% |
Best Large Cap Chemical Stocks in India #3: Solar Industries India Ltd.
Starting as a mere trader in explosives in 1983, Solar Industries was established in 1995 by Shri Satyanarayan Nandlal Nuwal developed from a single-site explosive manufacturing company to a globally recognized manufacturer.
Solar provides complete blasting solutions which include packaged, bulk explosives, and initiating systems. They are also developing new products for Defense and Military applications.
Data Source: Annual Report
It is the first Indian company to cross annualized production of 300000 MT of explosives. It is also the largest exporter of explosives from India and caters to more than 75 countries. Solar has 39 manufacturing plants in India, Zambia, Nigeria, Turkey, and South Africa. They are also expanding into Australia and Ghana.
Looking at the financials, the company reported a significant 75% increase in revenue from operations from Rs. 3947 Cr in FY22 to Rs.6922 Cr in FY23. The net profit after tax increased by 14% from Rs.455 Cr in FY22 to Rs.811 Cr in FY23.
The 3-year average RoE and RoCE stand at 27.13% and 27.26% indicating the company is efficiently using its resources and generating good returns for its shareholders. The 3-year average net profit margin is 11.48%.
The Debt-equity ratio stands at 0.45 times which is below the threshold level of 2 times. The interest coverage ratio at 13.19 times indicating that it is generating enough returns to pay its interest.
The promoter’s shareholding is high with 73.15% of shares as of Q3 FY24 and this percentage has been consistent in the last five years.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP (Rs) | 6,913.8 | Market Cap (Cr.) | 61,709 |
| EPS(TTM) | 89.32 | Stock P/E | 70 |
| RoE | 28.27% | RoCE | 32.3% |
| Promoter Holdings | 73.15% | FII Holdings | 5.90% |
| Debt to Equity | 0.45 | Price to Book Value | 19.79 |
| PBIT Margin | 17.22% | Net Profit Margin | 11.72% |
Best Large Cap Chemical Stocks in India #4: PI Industries Ltd.
Established in 1946, PI Industries is a global player in the agro-chemical space. It provides innovative solutions in the agrochemicals value chain from R&D to distribution.
PI Industries is in 30+ countries across 6 continents with 4 global offices. PAN INDIA PI has more than 80000 retail points. It operates 5 formulation facilities and 15 multipurpose plants across four manufacturing locations. The product portfolio includes insecticides, herbicides, fungicides, and biostimulants.
Data Source: Annual Report
Looking at the financials, the company reported a 22% increase in revenue from operations from Rs. 52995 Cr in FY22 to Rs.64920 Cr in FY23. The net profit after tax increased by 46% from Rs.8438 Cr in FY22 to Rs.12295 Cr in FY23.
The 3-year average RoE and RoCE stand at 17.23% and 20.44% indicating the company is efficiently using its resources and generating good returns for its shareholders. The 3-year average net profit margin is 16.30% indicating good profits.
The Debt-equity ratio stands at 0 times which indicates that the firm could survive on internal funds and is a sign of strong financials. The interest coverage ratio is 37.75 times.
The promoter’s shareholding is high with 46.09% of shares as of Q3 FY24 and this percentage has decreased by 0.66% from FY22.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP (Rs) | 3,356.3 | Market Cap (Cr.) | 52,219 |
| EPS(TTM) | 98.59 | Stock P/E | 38.27 |
| RoE | 18.74% | RoCE | 20.56% |
| Promoter Holdings | 46.09% | FII Holdings | 20.01% |
| Debt to Equity | 0 | Price to Book Value | 7.17 |
| PBIT Margin | 21.99% | Net Profit Margin | 18.94% |
Best Large Cap Chemical Stocks in India #5: UPL Ltd.
Founded in 1969 by Rajju D Shroff, UPL Ltd is a global plant health and seed company. It is 5th largest in the industry globally.
Its product portfolio includes 1344 products across seeds, seed treatment, herbicides, fungicides, rodenticides, and post-harvest. UPL is present in 138 countries with 43 manufacturing facilities and 18 R&D facilities it caters to over 600 external B2B clients.
The company reported a 16% increase in revenue from operations from Rs.46240 Cr in FY22 to Rs.53576 Cr in FY23. The net profit after tax decreased by 0.5% from Rs.4437 Cr in FY22 to Rs.4414 Cr in FY23.
The 3-year average RoE and RoCE stand at 20.36% and 14.81% indicating the company is operating efficiently and generating good returns. The operating margin is 12.59% but the net profit margin is only 6.85% mainly due to high depreciation and interest.
The Debt-equity ratio stands at 0.97 times, it is the highest in the list but it is below 2 times and the interest coverage ratio at 2.74 times.
The promoters hold 32.34% of shares as of Q3 FY24 and this percentage has increased by 3.89% from FY22, indicating a positive sign.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP (Rs) | 544.2 | Market Cap (Cr.) | 41,891 |
| EPS(TTM) | 24.73 | Stock P/E | 23.09 |
| RoE | 6.43% | RoCE | 9.02% |
| Promoter Holdings | 32.34% | FII Holdings | 34.39% |
| Debt to Equity | 0.97 | Price to Book Value | 1.66 |
| PBIT Margin | 12.59% | Net Profit Margin | 6.85% |
List Of Best Large Cap Chemical Stocks In India
| Particulars | PIDILITIND | SRF | SOLARINDS | PIIND | UPL |
|---|---|---|---|---|---|
| Net Profit Margin | 10.92% | 14.54% | 11.72% | 18.94% | 8.24% |
| EBITDA Margin | 16.82% | 23.41% | 18.62% | 22.89% | 15.82% |
| Return On Equity (ROE) | 19.04% | 22.91% | 35.86% | 18.45% | 18.20% |
| Return On Cap Employed (ROCE) | 25.18% | 22.62% | 36.34% | 21.84% | 15.70% |
| Return On Assets (ROA) | 16.82% | 23.41% | 18.62% | 22.89% | 15.82% |
| Earnings Per Share (EPS) | ₹ 25.05 | ₹ 72.95 | ₹ 83.67 | ₹ 80.89 | ₹ 47.60 |
| Dividend Yield | 0.47% | 0.30% | 0.22% | 0.33% | 1.39% |
| PE Ratio | 93.97 | 32.98 | 44.41 | 37.42 | 15.07 |
| Price To Book Value | 37.17 | 14.79 | 13.19 | 37.75 | 2.74 |
| Current Ratio | 0.02 | 0.42 | 0.45 | 0 | 0.97 |
| Interest Coverage Ratio | 37.17 | 14.79 | 13.19 | 37.75 | 2.74 |
| Debt To Equity Ratio | 0.02 | 0.42 | 0.45 | 0 | 0.97 |
Conclusion
As we conclude this article on “Best Large Cap Chemical Stocks”, we have understood the business and the financial performance of a few companies. A detailed analysis must be done before investing to understand the risk & return characteristics and suitability. Let us know your thoughts about these companies in the section below.
Frequently Asked Questions
Are large-cap chemical stocks a safe investment?
Investing in large-cap chemical stocks can be relatively safe due to the stability and established track records of these companies. However, like any investment, thorough research is essential.
How can I choose the best stocks for my portfolio?
Choosing the best stocks involves analyzing financial stability, growth potential, and market trends. Diversification and understanding your risk tolerance are also crucial factors.
What factors contribute to the growth of chemical stocks in India?
Factors such as increasing demand for specialty chemicals, government initiatives, and global market trends contribute to the growth of chemical stocks in India.
How often should I review my portfolio?
Regular portfolio reviews, at least quarterly, help investors stay informed about their holdings, reassess goals, and make necessary adjustments based on market changes.
What is the significance of dividend yield in stock investing?
Dividend yield indicates the annual dividend income as a percentage of the stock’s current market price. It can be a crucial factor for investors seeking income-generating stocks.
Can market trends impact the performance of chemical stocks?
Yes, market trends, such as shifts towards sustainable practices and technological advancements, can significantly impact the performance of chemical stocks.
Conclusion
In conclusion, navigating the dynamic landscape of large-cap chemical stocks in India requires a strategic and informed approach. By considering the insights shared in this article and understanding the unique attributes of each stock, investors can make confident decisions aligned with their financial objectives.
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