Best large-cap chemical stocks in India

Best large-cap chemical stocks in India: The chemical industry is central to modern life. We don’t know how these chemicals are used in most products in our daily lives. In this article, we will analyze some of the biggest players in this industry and take a look at their performance.

Best large-cap chemical stocks in India

Best Large Cap Chemical Stock in India #1: Pidilite Industries Ltd.

Pidilite Industries has consumer and specialty chemicals businesses in India. Established as a single factory in 1959, it produces only one product, ‘Fevicol’.

We manufacture products for a variety of applications, from small to large scale, in the home and industry. Pidilite’s product portfolio includes adhesives, sealants, waterproofing solutions and construction chemicals for arts and crafts, industrial resins and polymers. Famous brands include Fevicol, Fevicol Mr, Dr. These include Fixit, Fevikwik, Fevicryl, M-Seal and Fevistik.

Pidilite is present in 71 countries with major subsidiaries in Brazil, Sri Lanka, Thailand, Egypt, Dubai and Bangladesh. It has more than 8 manufacturing units.

According to the company’s financial report, its operating revenue increased by 19% from Rs.9920 Cr in FY22 to Rs.11799 Cr in FY23. Net profit after tax increased by 7% from Rs.1207 Cr in FY22 to Rs.1289 Cr in FY23. Sharp rises in interest rates and sluggish demand in developed markets have impacted demand, especially exports.

The three-year average RoE and RoCE are 20.59% and 27.17%, indicating that the company is operating efficiently and generating good profits.

The debt ratio is 0.02 times and the interest coverage ratio is 37.17 times, meaning that funds can be borrowed when necessary and the burden of interest payments is not large.

The promoters hold 69.84% stake as of Q3 FY24 and this ratio has remained somewhat consistent over the past few years, indicating a positive sign.

Best Large Cap Chemical Stock in India #2: SRF Ltd

SRF is a tire cord manufacturer that was established in 1970 with its first factory in Manali, India, and has grown into a diversified chemical company.

SRF is a chemical-based company engaged in the manufacture of industrial and specialty intermediates used in a variety of applications and sectors, from tires to air conditioners, mines to cricket pitches, automobiles to home appliances, food packaging to pharmaceutical raw materials. The main business divisions include Chemical Business (CB), Packaging Film Business (PFB), and Technical Textile Business (TTB).

We export to more than 90 countries and have 14 factories in 4 countries: India, Thailand, South Africa, and Hungary.

The company’s income statement reported a 19% increase in operating revenue from Rs.12434 Cr in FY22 to Rs.14870 Cr in FY23. Net profit after tax increased by 14% from Rs.1889 Cr in FY22 to Rs.2162 Cr in FY23.

The three-year average RoE and RoCE are 22.59% and 21.65%, respectively, indicating that the company is operating efficiently and showing good financial performance. The three-year average net profit margin is 14.48%.

The debt ratio is 0.42 times and the interest coverage ratio is 14.79 times, which means that the company is less dependent on external borrowings and has the ability to borrow funds when necessary.

The promoters hold 50.53% stake as of Q3 FY24, a ratio that has remained more or less consistent over the past five years. FIIs hold 19.6% of the stock, which indicates a positive sign as of Q3 FY24.

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

Starting out as a simple explosives trade in 1983, Solar Industries was founded by Shri Satyanarayan Nandlal Nuwal in 1995, growing from a single site explosives manufacturing company to a globally recognized manufacturer.

Solar offers complete blasting solutions, including packaged bulk explosives and initiator systems. They are also developing new products for defense and military applications.

It is the first Indian company to have an annual production of explosives exceeding 300,000 MT. It is also India’s largest exporter of explosives and supplies its products 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 financial statements, the company reported a significant 75% increase in operating revenue of Rs. From Rs.3947 Cr in FY22 to Rs.6922 Cr in FY23. Net profit after tax increased by 14% from Rs.455 Cr in FY22 to Rs.811 Cr in FY23.

The three-year average RoE and RoCE are 27.13% and 27.26%, indicating that the company is using its resources efficiently and generating good returns for shareholders. The three-year average net profit margin is 11.48%.

The debt ratio is 0.45 times, which is below the standard of 2 times. The interest coverage ratio is 13.19 times, indicating that the company is generating enough revenue to pay interest.

Promoter’s shareholding is high at 73.15% as of Q3 FY24 and this ratio has remained consistent over the past five years.

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

Founded in 1946, PI Industries is a global company in the agricultural chemicals sector. We provide innovative solutions in the pesticide value chain from R&D to distribution.

PI Industries has four global offices in more than 30 countries on six continents. There are more than 80000 retail stores in PAN INDIA PI. We operate five formulation facilities and 15 multi-purpose plants across four manufacturing locations. The product portfolio includes pesticides, herbicides, fungicides and biostimulants.

Looking at the financial statements, the company reported a 22% increase in operating revenue of Rs. 52995 Cr in FY22 to Rs.64920 Cr in FY23. Net profit after tax increased by 46% from Rs.8438 Cr in FY22 to Rs.12295 Cr in FY23.

The three-year average RoE and RoCE are 17.23% and 20.44%, indicating that the company is using its resources efficiently and generating good returns for shareholders. The three-year average net profit margin is 16.30%, showing a good profit margin.

A debt-to-equity ratio of 0x indicates that the company can survive with internal funds and indicates financial soundness. The interest coverage ratio is 37.75 times.

Promoter’s shareholding is as high as 46.09% as of Q3 FY24, which is 0.66% lower than FY22.

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

Founded by Rajju D Shroff in 1969, UPL Ltd is a global plant health and seed company. It is the 5th largest in the industry globally.

The product portfolio includes 1,344 products across seeds, seed treatments, herbicides, fungicides, rodenticides and post-harvest products. UPL has 43 manufacturing facilities and 18 R&D facilities in 138 countries and serves more than 600 external B2B customers.

The company reported a 16% increase in operating revenue from Rs.46240 Cr in FY22 to Rs.53576 Cr in FY23. Net profit after tax decreased by 0.5% from Rs.4437 Cr in FY22 to Rs.4414 Cr in FY23.

The three-year average RoE and RoCE are 20.36% and 14.81%, indicating that the company is operating efficiently and generating good profits. The operating profit margin is 12.59%, but the net profit margin is only 6.85%. This is mainly due to high depreciation costs and interest burden.

The debt ratio is 0.97 times, which is in the high rankings, but the interest coverage ratio is low at 2.74 times.

The promoters hold 32.34 per cent stake as of Q3 FY24, which shows an increase of 3.89 per cent over FY22, indicating a positive sign.

List of Best Large Cap Chemical Stocks in India

conclusion

As we conclude this article on “Best Large-Cap Chemical Stocks,” we understand the business and financial performance of a few companies. Detailed analysis must be done before investing to understand the nature and suitability of risk and return. Let us know what you think about these companies in the sections below.

Written by Ashish Agarwal

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