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.

 Best Large Cap Chemical Stocks - Pidilite Industries Logo Image

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”.

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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.

Best Large Cap Chemical Stocks -Pidilite Industries Revenue Breakup Report
Revenue Breakup
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.

ParticularsAmountParticularsAmount
CMP (Rs)2,698.4Market Cap (Cr.)1,38,616
EPS(TTM)29.6Stock P/E84.6
RoE20%RoCE26.75%
Promoter Holdings69.84%FII Holdings 11.49%
Debt to Equity0.02Price to Book Value16.92
PBIT Margin15.01%Net Profit Margin10.92%

Best Large Cap Chemical Stocks In India #2: SRF Ltd

Best Large Cap Chemical Stocks - SRF Ltd Logo

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.

Best Large Cap Chemical Stocks - SRF Revenue Breakup Report
Revenue Breakup
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.

ParticularsAmountParticularsAmount
CMP (Rs) 2,294.05Market Cap (Cr.)68,526
EPS(TTM)58.48Stock P/E40.21
RoE15.97%RoCE15.84%
Promoter Holdings50.53%FII Holdings19.60%
Debt to Equity0.42Price to Book Value6.42
PBIT Margin20.09%Net Profit Margin14.54%

Best Large Cap Chemical Stocks in India #3: Solar Industries India Ltd.

Solar Industries India Ltd. Logo Image

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.

Best Large Cap Chemical Stocks - Revenue Breakup
Revenue Breakup
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. 

ParticularsAmountParticularsAmount
CMP (Rs) 6,913.8Market Cap (Cr.)61,709
EPS(TTM)89.32Stock P/E70
RoE28.27%RoCE32.3%
Promoter Holdings73.15%FII Holdings5.90%
Debt to Equity0.45Price to Book Value19.79
PBIT Margin17.22%Net Profit Margin11.72%

Best Large Cap Chemical Stocks in India #4: PI Industries Ltd. 

PI Industries Ltd Logo Image

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.

PI Industries Ltd Revenue Breakup Report
Revenue Breakup
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.

ParticularsAmountParticularsAmount
CMP (Rs)3,356.3Market Cap (Cr.)52,219
EPS(TTM)98.59Stock P/E38.27
RoE18.74%RoCE20.56%
Promoter Holdings46.09%FII Holdings20.01%
Debt to Equity0Price to Book Value7.17
PBIT Margin21.99%Net Profit Margin18.94%

Best Large Cap Chemical Stocks in India #5: UPL Ltd. 

UPL Ltd Logo Image

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.

UPL Ltd Revenue Breakup Report
Revenue Breakup
Data Source: Annual Report

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.

ParticularsAmountParticularsAmount
CMP (Rs)544.2Market Cap (Cr.)41,891
EPS(TTM)24.73Stock P/E23.09
RoE6.43%RoCE9.02%
Promoter Holdings32.34%FII Holdings34.39%
Debt to Equity0.97Price to Book Value1.66
PBIT Margin12.59%Net Profit Margin6.85%

List Of Best Large Cap Chemical Stocks In India

ParticularsPIDILITINDSRFSOLARINDSPIINDUPL
Net Profit Margin10.92%14.54%11.72%18.94%8.24%
EBITDA Margin16.82%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 Yield0.47%0.30%0.22%0.33%1.39%
PE Ratio93.9732.9844.4137.4215.07
Price To Book Value37.1714.7913.1937.752.74
Current Ratio0.020.420.4500.97
Interest Coverage Ratio37.1714.7913.1937.752.74
Debt To Equity Ratio0.020.420.4500.97

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.

Written By Ashish Agarwal

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