Multibagger Update: These chemical stocks gained up to 925 per cent in five years; do you own any?

The nation's next-emerging export market is speciality chemicals. In addition, some of the clientele is moving from Europe to India due to the temporary shutdown of businesses there, owing to an energy crisis.

Analysts and investors are placing their bets on India's speciality chemical industry, which is anticipated to profit from the current international circumstances greatly. The market for speciality chemicals is migrating to India as a result of the Russia-Ukraine crisis and its effects while Indian businesses are well-positioned to benefit from this development. An added advantage is the decline in the rupee.  

The rupee has fallen to its lowest level versus the US dollar at 79.37 due to rising crude oil prices, central bank interest rate increases, and the ongoing flight of liquidity from the market. The bad news doesn't stop there; according to experts, the rupee might go as low as 82 versus the dollar. While this is a warning sign for the economy, it is a great chance for these export-focussed businesses.  

The nation's next-emerging export market is speciality chemicals. In addition, some of the clientele is moving from Europe to India due to the temporary shutdown of businesses there, owing to an energy crisis.  

Speciality chemicals could perform well as a result of stock price corrections over the past six to eight months along with energy deficit, particularly for gas in Europe.  

Thus, India is developing as a leader in this industry. India's speciality chemicals sector is well-positioned to take advantage of global tailwinds and increase its worldwide market share from its present level of 4 per cent to 7-8 per cent in the next few years.  

This is primarily attributable to the ‘China Plus One’ approach, which is a commercial tactic to diversify investments beyond China. As a result, the customers of Chinese corporations are moving their operations to Indian markets. Since China accounts for 20 per cent of the global speciality chemical market ($800 billion), even a 5 per cent change in market share from China to India might represent an $8 billion potential for Indian speciality chemical firms.   

Meanwhile, on a YTD basis, S&P BSE Smallcap index tanked 10.52 per cent whereas it has created returns of 66.80 per cent in the past five years.    

Following are some of the chemical stocks that have outperformed the markets in the last demi-decade:

Data as of July 21, 2022.