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  • Nov 24, 2023 - Top Performing Chemical Stocks of 2023. Take a Look...

Top Performing Chemical Stocks of 2023. Take a Look...

Nov 24, 2023

Top Performing Chemical Stocks of 2023. Take a Look...

Globally, the chemical industry commands a staggering annual revenue of nearly US$ 4 trillion (tn).

This sector has become a backbone for various industries, such as agriculture, pharmaceuticals, and food processing.

The Indian stock market has recognised this. Chemical stocks have emerged as highly appealing investment opportunities in the stock market.

Be it small-caps, mid-caps, or large-caps, chemical stocks have found takers at any given point in the past few months.

In line with their upward trajectory, let's look at the top -performing chemical stocks of 2023.

#1 Himadri Speciality Chemicals

Leading the list is Himadri Speciality Chemicals.

The company manufactures speciality chemicals used in various sectors, including carbon black, coal tar pitch, and advanced carbon materials.

In 2023 so far (between 1 January 2023 and 23 November 2023), the stock price has already rallied around 163%.

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This impressive growth was due to the strategic acquisition of the Australian startup Sicona Battery Technologies.

The investment of Rs 580 million (m) in a series A round of investment translated into a 12.8% stake in the company.

Sicona Battery Technologies specialises in high-capacity silicon anode technology for lithium-ion batteries used in electric vehicles (EVs).

As part of this strategic investment, Himadri will have two nominee directors on Sicona's board, fostering close collaboration and synergy between the two companies.

This partnership will solidify Himadri's position in the speciality chemicals sector and enable them to actively contribute to the advancement of lithium-ion battery technology for the electric vehicle industry.

In the future, the company intends to expand its product line by developing items for the renewable energy and electric vehicle markets.

For more details, see the Himadri Speciality Chemical company fact sheet and quarterly results.

#2 Polychem

Second on the list is Polychem.

Polychem is a global leader in the production of speciality chemicals. It also has a wide range of alcoholic beverages like whisky, vodka and brandy.

So far, in 2023, the stock price has rallied around 156%.

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This can be attributed to its strategic focus on speciality polymers catering to the casting industry.

With a strong foothold in end-user segments such as automotive, aerospace, and valves & instruments, Polychem's speciality polymers, especially the newly developed grades of Cross-Linked Polystyrene, are witnessing heightened demand in the export market.

Additionally, the stability in demand for their speciality product used as a filler in cement for structural repair further contributes to the positive outlook.

Despite facing competition, its proactive approach to adjusting prices to maintain competitiveness reinforces its position in the export market.

Going forward, the company plans to increase its share in the export market.

For more details, see the Polychem company fact sheet and quarterly results.

#3 Daikaffil Chemicals India

Third on the list is Daikaffil Chemicals India.

Daikaffil Chemicals is a chemical manufacturing company based in India that produces stilbene derivatives, paper, detergent, naphthol grounders for pigments, etc.

Its pigments find their use in ink, fabric, colouring paint, foods, and other materials.

Shares of the company have rallied 146% in 2023 so far, churning out multibagger returns.

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This rise can be attributed to the company's open offer.

Mikusu India Private Limited and Heranba Industries are offering to buy up to 1,560,000 fully paid-up equity shares of face value of Rs 10 each, representing 26% of the total equity and voting share capital of Daikaffil Chemicals India Limited.

The open offer will close on 8 December 2023 and is available to all shareholders of Daikaffil Chemicals India.

The strategic decision to extend this offer has sparked a positive rally in the stock, instilling optimism among investors.

Going forward, the company plans to increase its revenue in the coming years and strengthen its market share.

For more details, see the Daikaffil Chemical company fact sheet and quarterly results.

#4 Tanfac Industries

Fourth on the list is Tanfac Industries.

Tanfac Industries is promoted by Aditya Birla Group and Tamil Nadu Industrial Development Corporation (TIDCO). It is among the leading producers of Hydrofluoric Acid and its derivatives.

So far, in 2023, shares of Tanfac Industries have surged over 135%.

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This impressive growth is due to its strategic move to expand the capacity of its Hydrofluoric Acid Plant in Cuddalore by 14,850 MT, involving an estimated project cost of Rs 1 billion (bn).

Tanfac Industries' expansion marks a crucial milestone in its ambitious growth plan, positioning the company to complete the proposed expansion within the scheduled 15 to 18 months.

Further, the company has a debt-to-equity ratio and a total debt of zero.

Going forward, the company aims to further diversify its product portfolio by introducing new offerings such as aluminium fluoride, potassium fluoride, and boron trifluoride complexes.

For more details, see the Tanfac Industries company fact sheet and quarterly results.

#5 Chembond Chemicals

Last on the list is Chembond Chemicals.

Chembond Chemicals is engaged in manufacturing speciality chemicals. The company produces a range of speciality chemicals, including water treatment, polymers, construction chemicals, high-performance coatings, animal health, and industrial biotech products.

It offers a range of water treatment chemicals, namely boiler water treatment, chemicals, and more.

In 2023 so far, shares of the company have rallied 107%.

chart

This remarkable growth is due to the company's consistently strong financial performance.

Chembond Chemicals demonstrated a robust 26% year-on-year increase in revenue, soaring from Rs 3.5 bn in FY22 to Rs 4.4 bn in FY23.

Simultaneously, the net profit exhibited an impressive 84% growth, escalating from Rs 130 million (m) to Rs 240 m, fuelled by heightened international demand and reduced raw material costs.

Building on this solid foundation, the company reported a 1.7% year-on-year rise in revenue at Rs 1.1 bn in the September 2023 quarter.

Net profit for the quarter surged by 102.8%, reaching Rs 154.4 m from Rs 76.1 m a year earlier, driven by a reduction in production costs.

Looking ahead, Chembond Chemicals plans to intensify production and introduce new products, solidifying its position for continued growth in the speciality chemicals sector.

For more details, see the Chembond Chemicals company fact sheet and quarterly results.

Conclusion

Looking ahead the outlook remains promising, especially with lucrative opportunities emerging in the pharmaceutical sector in conjunction with an improved performance in the US market.

Companies in the industry have reported a positive shift from double-digit price declines to mid-single-digit reductions in the US market.

Further, the global chemical industry is expected to grow at a CAGR of 5.2% from 2021 to 2026.

This upward trajectory is fuelled by increasing disposable incomes, ongoing urbanisation and persistent industrialisation trends.

A noteworthy aspect of this growth is the accelerated demand for speciality chemicals, surpassing that of basic chemicals.

This surge can be attributed to the growing complexity of industrial processes, necessitating chemicals tailored to meet specific performance criteria.

It is crucial to recognise and address obstacles and difficulties as well.

The chemical industry is vulnerable to economic cycles, global events, and regulatory risks arising from strict environmental and safety regulations.

Investors should carefully evaluate their financial objectives, risk tolerance, and investment timelines before investing in top chemical stocks.

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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There is a huge demand for electric batteries coming from the EV industry, large data centres, telecom companies, railways, power grid companies, and many other places.

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Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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