India has been witnessing robust growth in the specialty chemicals sector. While the Indian chemical sector was earlier focused on bulk chemicals, now with the China+1 strategy, rising global demand, and increasing domestic manufacturing, India has become one of the top destinations for specialty chemicals.
What sets this sector apart is its uniqueness. Every specialty chemical company is different, with a particular set of customers, unique research and development tactics, and its dynamics. This is because specialty chemical manufacturers mostly focus on a specific category of chemicals, and there are a few who integrate multiple categories. For instance, while a specialty chemical company can focus only on textile chemicals, another one can focus on paints, or chemicals used in soaps, and others.
In this article, we will focus on five such specialty chemical companies that have grown significantly in the past three years. We will try to explore what’s driving the growth and the opportunities these companies hold for the future.
#1 Platinum Industries Limited (PLATIND)
Platinum Industries Ltd. is a leading manufacturer of PVC stabilizers, lubricants, and CPVC additives. It was established in August 2016 with a manufacturing facility in Palghar, Maharashtra. During 2022, it acquired another plant in Egypt to boost production.
From the PVC pipes industry to electrical wires, floor tiles, roofing solutions, and others, Platinum Industries serves all, with a 13% market share in the PVC additives according to Crisil.
Currently, the firm has a manufacturing capacity of 60,000 Metric Tons Per Annum (MTPA) in India, and once the Egypt facility is ready, the capacity can shoot up to double that of 120,000 MTPA.
Along with growth, the company has been taking care of its sustainability as well. It has invested a significant part of its IPO proceeds (launched in February 2024) into making lead-free products.
Coming to the financials, the sales of Platinum Industries grew from ₹188 crore in FY22 to ₹392 crore in FY25, a 28% compound growth per annum (CAGR). The net profit increased from ₹18 crore to ₹50 crore, registering a 41% CAGR during the same period.
The 3-year median Return on Equity (ROE) of Platinum Industries stood at 22% as of FY25.
Platinum Industries’ stock is trading at a Price/Earnings (PE) ratio of 30.4x, almost at par with the industry PE of 31.6x and a bit expensive when compared to its 10-year median PE of 28.7x.
#2 Epigral Limited (EPIGRAL)
Epigral Ltd., earlier known as Meghmani Finechem Ltd., started operations in 2007. It is now the largest producer of CPVC Resin in India. Epigral is the first chemical company to set up an Epichlorohydrin plant in the country.
During the first half of FY25, Epigral’s product portfolio had 56% of specialty chemicals and derivatives. In H1FY22, this number was just 25%. Going forward, the company expects the specialty chemicals share to increase to 70% by FY28.
Apart from CPVC resin, the company is also the 5th largest manufacturer of Chloromethanes (CMS) and the 3rd largest producer of Hydrogen Peroxide in the country.
Epigral has been investing heavily in CPVC, intending to increase the manufacturing capacity to 150 Kilo Ton Per Annum (KTPA) by H1FY27 from its capacity of 75 KTPA as of FY25. The total manufacturing capacity of specialty chemicals was 235 KTPA at the end of FY25.
The sales of Epigral Ltd. grew from ₹1,551 crore in FY22 to ₹2,550 crore in FY25, at an 18% CAGR. The net profit for the same period surged from ₹253 crore to ₹357 crore, registering a 12% CAGR.
The average ROE for the period between FY22 and FY25 stood at 25%.
The stock is trading cheaper at a PE of 22.1x compared to the industry PE of 31.6x; however, it is almost at par with its own 10-year median PE of 21.2x.
#3 Navin Fluorine International Limited (NAVINFLUOR)
Navin Fluorine International Ltd. has been one of the first companies to enter the specialty chemical business in India. It was started in 1967 with the establishment of an integrated fluorochemical complex to produce anhydrous hydrofluoric acid (AHF), diluted hydrofluoric acid (HF), refrigerants, and other complex chemicals.
The manufacturing plant is located at Surat, in Gujarat, which spreads over 135 acres. A New Greenfield Investment at Dahej has also been commissioned.
During FY25, the company invested around ₹450 crore to build another AHF plant. It also entered into a strategic partnership with Chemours during FY25 to enter the advanced material space and offer high-end products such as immersion cooling fluids to facilitate the needs of data cooling centers. Chemours is one of the leading global chemical manufacturers with over 60 manufacturing facilities, joint ventures, laboratories, and offices across the globe. Chemours offers a wide range of chemicals, including refrigerants, titanium dioxide, resins, chlor-alkali, and more.
Coming to the financials of Navin Fluorine, sales surged from ₹1,453 crore in FY22 to ₹2,349 crore in FY25, registering a 17% CAGR. The net profit increased from ₹263 crore to ₹289 crore, at a 3% CAGR.
The 3-year median ROE stood at 13% for the same period.
The stock has been trading at a PE of 83x, which is way higher than its own 10-year median PE of 35.4x and the industry PE of 31.6x.
#4 Neogen Chemicals Limited (NEOGEN)
Neogen Chemical Ltd. has been operating since 1991 and specializes in producing Bromine and lithium-based specialty chemicals. The clientele of the firm includes engineering firms, battery chemical producers, agrochems, and even pharma companies.
During the past five years, Neogen has doubled its inorganic chemical production capacity from 1,200 million tons (MT) to 2,400 MT. The organic reactor capacity stood at 45,000 litres during 2012, which has been increased to a massive 407,000 litres during 2021.
Neogen has some massive expansion plans for FY26, which include increasing the Lithium Electrolyte Salts and additives production at Dahej by another 2,100 MT per annum. Then it has acquired land at Pakhajan, Dahej PCPIR for establishing new facilities which can shoot up the production of Electrolytes by 30,000 MT and Lithium Electrolytes Sales and additives capacity by another 3,000 MT.
The sales of Neogen have gone up from ₹487 crore in FY22 to ₹778 crore in FY25, at a 17% CAGR. However, the net profit generated by the firm has dropped from ₹45 crore in FY22 to ₹35 crore in FY25, registering a negative CAGR of 1% for the period.
The average ROE for the past three years from FY22 to FY25 was 7%.
Neogen shares are trading at a super high PE of 99.2x compared to its industry PE of 31.6x, and even to its 10-year median PE of 74.8x.
#5 Jyoti Resins and Adhesives Limited
Jyoti Resins and Adhesives Ltd. was started in 1994 with a manufacturing setup of 8,000 square yards at Santej in Ahmedabad. The company has been known for its wide range of wood adhesives or white glue, which it sells under the brand name of “EURO 7000”.
The manufacturing capacity of the firm increased gradually from 250 tons per month (TPM) in 2007 to 1,000 TPM in 2018-2019 to 2,000 TPM in 2022-2023. This brand, Euro 7000, is the second-highest selling brand in the wood adhesive industry in India.
Jyoti Resins is planning to expand its warehouse facilities for enhanced storage of the raw materials and is also eyeing new states and industries to foray into. It already has a network of distributors, retailers, and branches across 14 states.
Coming to the financials, the sales of Jyoti Resins increased from ₹182 crore in FY22 to ₹284 crore in FY25, at a 16% CAGR. The net profit surged from ₹20 crore in FY22 to ₹74 crore in FY25, registering a 59% CAGR during the period.
The average ROE for three years between FY22 and FY25 stood at 45%.
The stock is trading at a PE of 22.1x, marginally cheaper than its 10-year median PE of 25.6x and industry PE of 31.6x.
Wrapping up
The IndianSpecialty Chemical sector is witnessing a boom with rising demand, domestic manufacturing, and the China+1 strategy. The top five industry players, according to 3-year sales growth, have been increasing their manufacturing capacities massively, which indicates the growing demand for specialty chemicals. It will be interesting to see how the industry booms in the future.
Disclaimer:
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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