Best Chemical Stocks in India

India's chemical sector is one of the fastest-growing in the world, serving as a critical enabler for various industries including agriculture, textiles, pharmaceuticals, automotive, and construction. With the country emerging as a viable alternative to China in the global supply chain, the demand for Indian chemical companies has skyrocketed. Investors seeking long-term growth opportunities are increasingly turning their attention to this sector.

The Indian chemical industry is expected to reach a market size of USD 220 billion by 2025, reaching a size of $300 billion by 2030 and a market size of $1 trillion by 20240, according to IBEF. Backed by strong fundamentals, policy support, and export competitiveness, top chemical stocks in India are well-positioned for sustained growth.

In this blog, we explore the best chemical stocks in India, their market performance, business focus, and future outlook to help you make an informed investment decision.

Chemical Industry in India – A Brief Overview

India ranks as the 6th largest chemical producer globally and 3rd in Asia. The sector contributes over 7% to the national GDP and is a major driver of exports, accounting for 13-14% of total merchandise exports.

Key Highlights:

• Size: Valued at USD 220+ billion as of FY24

• Employment: Over 2 million people

• Segments: Petrochemicals, agrochemicals, speciality chemicals, industrial gases, and bulk chemicals

• Policy Support: Production Linked Incentive (PLI) scheme, reduction in import dependency

• China+1 Advantage: Global manufacturers are shifting focus to Indian chemical suppliers for supply chain resilience

Top Chemical Stocks in India (2025) by Market Capitalisation

Note: Market capitalisations are approximate and based on April 2025 data. Market capitalisation equals the number of free float shares* current market price of the stock

Overview of Best Chemical Stocks in India

1. Pidilite Industries Ltd (PIDILITIND)

Overview: Pidilite Industries is synonymous with adhesives in India. Its flagship product, Fevicol, is a market leader and part of India’s consumer psyche. The company also manufactures sealants, construction chemicals, and art & craft materials.

Key Business Areas:

• Consumer adhesives and sealants

• Construction and waterproofing solutions

• Industrial resins and binders

Strategic Initiatives:

• Expanding rural and Tier 3 markets with focused distribution

• Acquisitions, including Araldite and Huntsman India’s consumer business

Future Plans:

• Strengthening R&D to create eco-friendly and high-performance products

• Deepening market penetration in overseas markets

2. SRF Ltd (SRF)

Overview: SRF has evolved from a tyre cord manufacturer to a diversified chemicals and materials science company. Its specialty chemicals segment serves pharma, agro, and industrial markets globally.

Key Business Areas:

• Specialty and fluorochemicals

• Technical textiles and packaging films

• Industrial intermediates

Strategic Initiatives:

• Focus on high-value fluorospecialties for global export.

• Long-term supply contracts with global agro and pharma majors

Future Plans:

• ₹1,200+ crore CapEx in specialty chemicals and capacity expansion

• Increasing global footprint with overseas subsidiaries

3. Linde India Ltd (LINDEINDIA)

Overview: A part of the global Linde Plc group, Linde India leads in industrial, medical, and specialty gases. It caters to steel, pharma, healthcare, and engineering sectors.

Key Business Areas:

• Oxygen, nitrogen, argon, CO2

• Medical gases for hospitals

• Gas distribution and cryogenic engineering solutions

Strategic Initiatives:

• Partnering with hospitals for medical oxygen supply

• Long-term industrial gas contracts with large corporates

Future Plans:

• Entry into green hydrogen and carbon capture technologies

• Expansion of air separation units in industrial corridors

4. Gujarat Fluorochemicals Ltd (GUJFLUORO)

Overview: GFL is a leading manufacturer of fluoropolymers and chemicals used in high-growth industries such as EVs, semiconductors, and renewables. It has a strong export orientation.

Key Business Areas:

• Fluoropolymers and fluoroelastomers

• Refrigerants and intermediates

• Clean energy and electronics-grade chemicals

Strategic Initiatives:

• Strong backward integration reduces input cost volatility.

• Focused expansion in energy storage and semiconductor applications

Future Plans:

• New capacity addition in fluorospecialties

• Entering the high-purity chemical segment for EV batterie

5. Godrej Industries Ltd (GODREJIND)

Overview: Godrej Industries operates in oleochemicals, surfactants, and animal feed. It also holds stakes in Godrej Consumer, Properties, and Agrovet, offering diversified exposure.

Key Business Areas:

• Oleochemicals for FMCG and cosmetics

• Animal feed and agri-inputs

• Surfactants and speciality ingredients

Strategic Initiatives:

• Focus on sustainable, bio-based products

• Leveraging group synergies for product development

Future Plans:

• Expansion into premium personal care ingredients

• Growth in overseas FMCG and agri-export markets

6. Deepak Nitrite Ltd (DEEPAKNTR)

Overview: Deepak Nitrite is a pioneer in performance chemicals and intermediates used in pharma, dyes, and agro sectors. It has a reputation for high ROCE and strong profitability.

Key Business Areas:

• Basic chemicals like nitrites, nitrates

• Performance products including colourants

• Fine and specialty chemicals

Strategic Initiatives:

• Expansion of Deepak Phenolics division (acetone, phenol)

• Entry into high-margin electronic and pharmaceutical chemicals

Future Plans:

• ₹1,500+ crore investment in downstream and greenfield projects

• Focus on import substitution and export markets.

Benefits of Investing in Chemical Stocks in India

• Robust Export Demand: Indian chemical firms benefit from global outsourcing.

• Diversified Applications: These companies serve pharma, agriculture, autos, and infrastructure.

• High Entry Barriers: Regulatory and technical expertise keep competition low.

• Policy Support: Incentives under PLI, duty protection, and Make in India initiatives.

Factors to Consider Before Investing in Top Chemical Stocks

• Environmental Compliance: Stringent norms can impact margins

• Commodity Price Volatility: Especially for crude-linked raw materials

• Cyclicality: Bulk chemical segments are more cyclical than specialty chemicals

• Forex and Export Risks: Currency fluctuation can impact earnings

Investor Checklist:

To evaluate chemical stocks effectively, keep these key factors in mind:

• ROE/ROCE Consistency: High and stable Return on Equity (ROE) or Return on Capital Employed (ROCE) indicate efficient use of capital and good profitability. Look for companies with ROCE above 15% over multiple years.

• R&D Spending Trends: Innovation is critical in specialty chemicals. Companies that consistently invest in R&D can create high-margin proprietary products and stay ahead of global compliance trends.

• Debt Levels and CapEx Plans: Low debt-to-equity ratios suggest strong financial health. At the same time, planned CapEx should be strategically aligned to market demand and product diversification without overleveraging.

• End-Market Diversification: Companies that cater to a range of industries like pharma, agrochemicals, autos, and construction are better cushioned from sector-specific downturns and show resilient revenue streams.

Future Outlook for Chemical Stocks in India

The outlook remains bullish, driven by both domestic and global trends:

• Global clients shifting sourcing to India (China+1)

• Emerging demand for electronics, green energy, and sustainable chemicals

• Government support via infrastructure and trade incentives

CRISIL estimates India’s specialty chemicals industry will grow at 11-12% CAGR over the next 5 years, outperforming many traditional sectors.

Conclusion

India’s chemical sector is not just a growth story, it’s a transformation narrative. As the industry shifts towards high-value, sustainable, and innovation-led manufacturing, leading chemical stocks are well-placed to deliver robust returns over the long term. By investing in companies with strong fundamentals, diversified portfolios, and future-ready strategies, you can capitalise on this momentum and add resilience to your investment portfolio.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Market capitalisation figures are approximate and subject to change. Investors should conduct their research or consult financial advisors before making investment decisions.