Indian chemical stocks have taken a sharp turn, falling about 40% as companies grapple with cheaper Chinese imports, weak demand and rising costs.
Why the sector is under pressure
The chemical industry in India serves many markets – from cars and construction to pharma and farming. Recent numbers show that most firms are feeling the squeeze because:
- China’s excess capacity is pushing down prices for Indian producers.
- Cheaper Chinese alternatives are winning market share.
- In the agro‑chemical segment, farmers are buying less and clearing old inventory.
- Input costs such as raw materials and logistics are higher, squeezing margins.
Company snapshots
Neogen Chemicals
- Specialises in bromine‑based and lithium‑based chemicals for pharma, electronics, water treatment and energy storage.
- Shares are down almost 49% from their 52‑week high.
- A fire at the Dahej plant in March raised insurance premiums and repair costs.
- Q2 FY26 revenue: ₹208 cr (up from ₹193 cr YoY); net profit: ₹3.3 cr (down from ₹10.9 cr YoY).
- Plans to start a new electrolyte plant by the end of the year, with commercial production expected in early FY27.
- Recent approvals from a major Indian battery maker and an international customer boost confidence.
Clean Science and Technology
- Produces fine and specialty chemicals using proprietary catalytic processes.
- Shares have fallen about 45% from their 52‑week peak.
- Q2 FY26 revenue: ₹244.6 cr (slight rise); net profit: ₹55.4 cr (down from ₹58.7 cr YoY).
- Customers are buying less because Chinese rivals are offering lower prices, and some are delaying purchases due to market uncertainty.
- Invested ₹1,500 m in its subsidiary CFCL; successful trials of Performance Chemical 1 and commercial launch of barbituric acid.
Balaji Amines
- Focuses on methylamines, ethylamines and pharma‑grade excipients.
- Shares are down roughly 43% from 52‑week highs.
- Q2 FY26 sales: ₹340.6 cr (vs ₹346.9 cr YoY); net profit: ₹37.1 cr (vs ₹41.5 cr YoY).
- Management expects margins to hold as commodity prices stay steady.
- New capacities at the DME plant and N‑Methyl Morpholine projects are slated for commissioning in FY26; a larger acetonitrile expansion is planned for FY27.
- Subsidiary Balaji Specialty Chemicals is progressing on a ₹750 cr expansion covering cyanide products.
Sudarshan Chemical Industries
- Global pigment leader after merging with Germany’s Heubach Group.
- Shares have dropped about 41% from their 52‑week high.
- Q2 FY26 sales surged to ₹2,387.4 cr (up from ₹696.1 cr YoY) but net profit fell to ₹10 cr (down from ₹29.9 cr YoY) because demand weakened.
- Weakness is seen in coatings and plastics, especially in Europe, the US and Latin America, where high interest rates are curbing spending.
- Management expects a soft Q3 but sees demand picking up from Q4 onward.
Should you consider chemical stocks?
These companies have all faced a mix of industry‑wide headwinds and individual challenges. While the recent price drops could create value opportunities, investors should tread carefully, check each firm’s fundamentals, governance and valuation, and keep an eye on broader recovery signals.
Remember, this is just an overview, not a recommendation. Do your own research before making any investment decisions.