52 DALAL STREET INVESTMENT JOURNAL I JULY 22 - AUG 4, 2019 DSIJ. in^
Financial Review For FY19
Chemicals
I
ndia’s chemical industry is one of the fastest growing in
the world and is currently ranked the third largest in
Asia and sixth globally in terms of output after the US,
China, Germany, Japan and Korea.The chemical sector, which is knowledge- and capital-intensive,
is the mainstay of industrial and agricultural development, and
has application across various industries such as textiles,
papers, paints, soaps, detergents, and pharmaceuticals, among
others.
The chemical industry can be classified mainly into three
segments, viz. basic, specialities and knowledge chemicals. (1)
Basic: Petrochemicals, fertilizers, inorganic chemicals, alkalies,
chloralkalies, aromatics, thermoplastics, thermosets and other
industrial chemicals. (2) Speciality: Adhesive, sealant, catalysts,
industrial gases, paints and coating, pharma additives,
lubricants, water treatment chemicals, plastic additives (3)
Knowledge: Agrochemicals, pharmaceuticals, biotechnology.
We can further classify the industry product-wise, which
comprise of alkali chemicals (soda ash, caustic soda, liquid
etc.), inorganic chemicals (aluminum fluoride, calcium carbide,
carbon black, etc.), organic chemicals (acetic acid, acetone,
phenol, methanol, etc.), pesticides & insecticides and dyes &
dyestuffs.For the purpose of sector analysis, we have analysed 70
companies in the chemical sector according to their market
cap. The overall revenue of the sector increased by 18.3 per cent
and PBIT also increased significantly by 18.8 per cent during
FY19. Also, the net profit of the overall industry jumped
significantly by 13.9 per cent in FY19.Of this set of companies, 90 per cent companies’ revenue grew
at steady rate with 47 companies reporting double digit growth
in revenue. The revenue of companies like Sadhana Nitrochem,
Hindustan Organic Chemicals, Transpek Industry and Deepak
Nitrite grew by 133.5 per cent, 82.9 per cent, 63.5 per cent and
61.1 per cent respectively in FY19. The operating profit of
companies like Camlin Fine Sciences, Sadhana Nitrochem,
Transpek Industry, Godrej Industries, Dharamsi Morarji grew
by 343.9 per cent, 245.8 per cent, 147.6 per cent, 134.7 per cent,Sector Sponsor