Is India's Chemicals Sector Leading the Global Market with 28% Returns?
Click to start listening
Synopsis
India's chemicals sector has set a global benchmark with a staggering 28% total shareholder return from 2020 to 2024, far exceeding the global average. Discover how robust domestic demand and strategic policies have propelled this industry to the forefront of value creation, and what the future holds for Indian companies in this dynamic landscape.
Key Takeaways
- India's chemicals sector leads globally with a TSR of 28 percent.
- Domestic demand and policy support are key performance drivers.
- Specialty segments significantly contributed to industry growth.
- Focused firms achieved TSRs well above global averages.
- Future growth depends on strategic scaling and innovation.
New Delhi, Sep 16 (NationPress) India's chemicals sector has emerged as a global frontrunner in value generation, boasting a remarkable five-year total shareholder return (TSR) of 28 percent from 2020 to 2024. This performance significantly surpasses the global average of 7 percent, as highlighted in a recent report by Boston Consulting Group.
The exceptional performance of India's chemicals industry can be attributed to robust domestic demand, strategic policy support, and enhanced investor confidence, which collectively boosted valuation multiples.
Key contributors to this success include agrochemical exports and domestic demand, as well as specialized sectors such as pharmaceutical ingredients, personal care products, and engineered materials. The report emphasizes that fertiliser returns were primarily fueled by domestic demand.
Indian firms specializing in targeted segments achieved an impressive 33 percent TSR, while fertilisers recorded 32 percent returns, both significantly outpacing global averages. TSR indicates the percentage increase in a company's value, which encompasses stock price and dividends over a specified period. Emerging market chemical companies overall delivered a strong five-year TSR of 12 percent.
This remarkable performance stems from both revenue and profit growth, along with elevated P/E multiples, driven by sustained domestic demand, according to Amit Gandhi, Managing Director & Senior Partner at BCG India.
The next phase of growth will depend on how Indian companies choose to expand over the next five years, whether through strengthening existing value chains or exploring new avenues, he stated.
BCG's report suggested that firms concentrating on commercial excellence, disciplined capital allocation, and portfolio quality are well-positioned to sustain this momentum.
Chemical products ranked among the top five sectors contributing to the country's GVA growth in FY 24, alongside basic metals, motor vehicles, food products, and pharmaceuticals.
Currently, more than 5,500 farmer collectives are licensed to distribute fertilisers, and over 400 FPOs manage dealerships for agrochemical distribution, ensuring that dealer discounts benefit member farmers.
Point of View
It is evident that India's chemicals sector is not only thriving but also setting a precedent for value creation on a global scale. The robust performance driven by domestic demand and strategic policies reflects a promising future for the industry. It is crucial for stakeholders to focus on innovation and sustainability to maintain this trajectory.
NationPress
12/11/2025
Frequently Asked Questions
What is the total shareholder return (TSR) of India's chemicals sector?
India's chemicals sector has achieved a total shareholder return (TSR) of 28 percent from 2020 to 2024.
What factors have contributed to this performance?
The performance can be attributed to strong domestic demand, targeted policy support, and improved investor sentiment.
How do Indian firms compare with global averages?
Indian firms focusing on specialties achieved a 33 percent TSR, while fertilisers recorded 32 percent returns, both significantly higher than global averages.
What industries are contributing to GVA growth in India?
The chemicals sector is among the top five industries contributing to GVA growth, alongside basic metals, motor vehicles, food products, and pharmaceuticals.
How many farmer collectives are involved in fertiliser distribution?
There are over 5,500 farmer collectives licensed to distribute fertilisers in India.
