The specialty chemicals sector in India is characterised by strong growth potential, driven by strong domestic demand across key industries such as agriculture, pharmaceuticals, and construction.
The Indian chemical industry is expected to reach $300 billion by 2030 and $1 trillion by 2040, indicating significant growth opportunities for specialty chemicals. Despite global uncertainties, this sector remains a vibrant hub of potential.
By 2025, the specialty chemicals market in India is projected to reach $64 billion. Historically, India has been a global leader in generics, biosimilars, and vaccine production, contributing over 50 percent of the global vaccine supply.
The Indian chemical industry is expected to grow at a compound annual growth rate (CAGR) of 11-12 percent by 2027, increasing India’s share of the global specialty chemicals market from 3-4 percent.
A CRISIL report suggests that the Indian specialty chemicals market will outpace growth in China, with its market share rising to 6 percent by 2026, up from 3-4 percent in FY21.
Government initiatives to enhance manufacturing and export activities are likely to further boost the sector, making it an appealing investment opportunity.
In response to the rising demand for electric vehicle (EV) batteries, many Indian specialty chemical companies are making substantial investments to enter the EV market.
Following are a few more specialty chemical stocks that have ventured into the electric vehicle (EV) business:
Aether Industries Limited
With a market cap of Rs. 13,284.8 crores, the shares of one of India’s leading specialty and fine chemical manufacturers surged nearly 2 percent on BSE to Rs. 1,026 on Friday.
In December 2023, Aether Industries announced a strategic agreement with a global lithium-ion battery producer to enter the electrolyte additives space. The agreement includes the commercial supply finalisation of one electrolyte additive and initiates discussions for additional products.
The company has reported a significant growth in revenue from operations, with an 11.8 percent YoY rise from Rs. 161 crores in Q1 FY24 to Rs.180 crores in Q1 FY25. The net profit increased marginally by 0.7 percent YoY from Rs. 29.8 crores to Rs. 30 crores, during the same period.
The stock has delivered negative returns of nearly 2.6 percent in one year, but around 10 percent of positive returns year-to-date.
Incorporated in 2013, Aether Industries Limited is a speciality chemical manufacturer in India focused on producing advanced intermediates and specialty chemicals involving complex and differentiated chemistry and technology core competencies. It is also a leading CRAMS (Contract Research and Manufacturing Services) provider.
Ami Organics Limited
With a market cap of Rs. 6,184 crores, the shares of a leading global manufacturer of advanced pharmaceutical intermediates and speciality chemicals surged nearly 6.2 percent on BSE to hit a new 52-week high at Rs. 1,549.75 on Friday.
In December 2023, Ami Organics signed a non-binding Memorandum of Understanding (MoU) with a global manufacturer of Electrolytes for the manufacturing of electrolytes for battery cells and allied materials in Gujarat, India.
Additionally, the company signed another MOU with the Government of Gujarat, with an investment of Rs. 300 crores to set up a dedicated manufacturing facility for the electrolytes business in Gujarat.
The company has reported a significant growth in revenue from operations, with a 15 percent YoY rise from Rs. 154 crores in Q1 FY24 to Rs. 177 crores in Q1 FY25. However, the net profit increased by 31.8 percent YoY from Rs. 22 crores to Rs. 15 crores, during the same period.
The stock has delivered positive returns of nearly 6 percent in one year as well as around 24 percent returns year-to-date.
Ami Organics Limited is engaged in the business of manufacturing different types of Advanced Pharmaceutical Intermediates and Active Pharmaceutical Ingredients (API) for New Chemical Entities, and materials for agrochemicals and fine chemicals.
Neogen Chemicals Limited
With a market cap of Rs. 4,045.6 crores, the shares of India’s one of the leading manufacturers of Bromine-based and Lithium-based specialty chemicals surged 1.7 percent on BSE to Rs. 1,568.9 on Friday.
In April 2023, Neogen partnered with Japan’s MU Ionic Solutions to manufacture electrolytes for EV batteries in India. They plan to start commercial production with a capacity of 30,000 MT per annum in 2025, with an initial investment of Rs. 450 crores.
MU Ionic Solutions (MUIS), a JV between Mitsubishi Chemical Corporation (MCC) and UBE Corporation, is a group company of The Mitsubishi Chemical Group (the group), a Japanese conglomerate.
As per the terms of the agreement, Neogen will obtain a license from MUIS for proprietary and confidential manufacturing technology.
This technology will be used to produce for making Neogen’s electrolyte solutions at its manufacturing facility in India, with a planned maximum installed capacity of up to 30,000 MT per annum.
The electrolytes will be aimed at addressing the increasing demand from lithium-ion cell manufacturers in India.
The company has reported a significant growth in revenue from operations, with a 9 percent YoY rise from Rs. 165 crores in Q1 FY24 to Rs. 180 crores in Q1 FY25. Similarly, the net profit increased marginally by 10 percent YoY from Rs. 10 crores to Rs. 11 crores, during the same period.
The stock has delivered negative returns of nearly 15.5 percent in one year, while around 1.6 percent of positive returns year-to-date.
Neogen Chemicals Limited is engaged in the business of manufacturing eco-friendly speciality chemicals which are used in the pharmaceutical, engineering and agrochemical industries.
Written by Shivani Singh
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