Are you aware that you’re willingly or unwillingly using chemical stocks from the chemical sector? Yes, you are! But let’s start with the basics and learn about chemical stocks before jumping onto the chemical sector.
What are Chemical Stocks?
Chemical stocks are the shares of companies that are a part of the chemical industry. The chemical industry is a vast and diverse industry responsible for producing products involving specialty chemicals and basic chemicals.
Specialty chemicals are the higher value-added products being leveraged in particular applications, like paints and coatings, personal care products, and electronic chemicals.
On the other hand, basic chemicals, like industrial gasses, petrochemicals, and fertilizers, are used as raw materials in several industries, including pharmaceuticals, textiles, and plastics.
The ultimate aim of every investor or trader is to increase their wealth or to grow money. Therefore you should search for good stocks to invest your money and get higher returns. You can only lose money if you invest in the correct stocks. That’s why it is highly recommended to research stocks before making any investment.
In addition, to make your research more impressive, we are here with multiple factors that one should consider before investing in chemical sector stocks. So, let’s have a glance at it.
Key Factors to Keep in Mind Before Making Investment in Chemical Stocks
1. Market Competition
It is crucial to understand the market’s existing condition before investing in chemical sector stocks. Thus, keenly observe the global market, regulatory changes, and geopolitical issues that could significantly impact the chemical share price.
2. Environmental Factors
Always think of humanitarian grounds as chemicals are harmful to them. Therefore, it’s crucial to consider whether the companies you are considering investing in follow sustainable norms before investing in chemical sector stocks.
3. Market Competition
The chemical sector faces enormous market competition, with prominent players (investors or traders) trading for share markets. Thus, analyze the current competition of the companies you’re heading to invest your money in.
4. Technological Advancements
With the advent of advanced technologies, the chemical sector is changing rapidly and coming up with innovations every time. Hence, one should ensure that the companies on your bucket list invest sufficient time in the R&D part to stay one step ahead in the market.
5. Company’s Finances
One of the most significant factors to remember before investing in chemical sector stocks is to analyze the financial condition of the companies. Look at their chemical share price, earnings per share, debt levels, and revenue growth to determine whether they are financially strong and capable of growing well.
Some Well-known Chemical Stocks that Provides Multibagger Returns
| Stock Description | |
|---|---|
 Divis Laboratories |
Large Cap It is an Indian pharmaceutical company that produces active pharmaceutical intermediates and ingredients. Current Price: ₹3260 |
 Tata Chemicals |
Mid Cap Tata Chemicals Ltd is an Indian global company interested in crop protection, chemicals, and specialty chemical products. Current Price: ₹933 |
 Clean Science |
Small Cap Clean Science and Technology is a producer of cleanliness items, equipment, and products. Current Price: ₹1403 |
Indian Government on Import of Chemicals
India is diminishing its reliance on chemicals specially imported from China and producing them within the boundary.
This has happened due to two significant reasons. The first is the COVID-19 dispute, and the other is barricading its supply dependence on China because of a border dispute.
To Sum Up
The Indian Government has taken several measures to increase domestic production of feedstock materials, petrochemicals, and methanol under a policy called Self-reliant India or Atmanirbhar Bharat.
As a result, in-house facilities have escalated for several feedstock chemicals and materials in support of the domestic chemical industry to receive huge returns.