The INR’s consistent weakness against the US dollar has been rattling the markets and the wider economy. While export-oriented sectors like information technology and pharmaceuticals are the traditional beneficiaries of a weak rupee, this time around, there is another sector that has caught investors’ interest.
Analysts and investors are betting on India’s specialty chemical sector, which is expected to benefit immensely from the current global conditions. The Russia-Ukraine conflict and its fallout is seeing the demand for specialty chemicals shifting to India, and Indian companies are well-positioned to take advantage of this situation. The rupee’s slide is an added bonus.
India’s specialty chemicals sector is well poised to capitalise on global tailwinds and expand its global market share to 7-8% in the next few years from 4% currently, says a report by Sharekhan.
This is mainly due to the ‘China Plus One’ strategy, which is the business strategy to avoid investing only in China and diversify business into other countries. Thus, clients of Chinese companies are shifting their businesses to Indian markets.
Players such as Galaxy Surfactants, Rossari and Fineotex Chemicals are seeing solid demand from user industries like textile, FMCG, etc, along with market share gains in the global market, says a report by Edelweiss.
|chemicals stocks preferred by analysts||Target price for 12-month ₹|