India’s chemicals industry has emerged as the global leader in value creation, delivering a five-year total shareholder return (TSR) of 28% between 2020 and 2024. This performance is nearly four times the global average of 7%, according to a report released on Tuesday by the Boston Consulting Group (BCG).
Drivers of Outperformance
The report attributes India’s strong showing to resilient domestic demand, supportive policy measures, and improved investor sentiment, which boosted valuation multiples. Segments such as agrochemicals, pharmaceutical ingredients, personal care, and engineered materials contributed significantly to the growth momentum. Fertilisers also saw strong performance, largely driven by robust domestic demand.
Segment-Wise Returns
Indian companies in specialty chemicals recorded a 33% TSR, while fertiliser players delivered 32% TSR—both well above global benchmarks. By comparison, chemical firms in emerging markets overall delivered an average five-year TSR of 12%.
Industry Insights and Outlook
“Revenue and profit growth, coupled with stronger P/E multiples, have powered this outperformance,” said Amit Gandhi, Managing Director and Senior Partner, BCG India. He added that the next phase of advancement will depend on how companies scale—whether by deepening existing value chains or branching into new ones.
Maintaining Momentum
BCG states that companies prioritising commercial excellence, disciplined capital allocation, and high-quality portfolios sustain value creation most effectively.
Contribution to India’s Economy
Chemicals were among the top five industries driving Gross Value Added (GVA) growth in FY24, alongside basic metals, motor vehicles, food products, and pharmaceuticals. On the distribution front, India now has over 5,500 farmer collectives licensed to sell fertilisers and more than 400 farmer producer organisations (FPOs) running agrochemical dealerships, ensuring cost benefits are passed directly to farmers.
A Global Benchmark
As reported by theindiawire.com, with its superior returns and strong domestic base, India’s chemicals industry is setting the pace for global peers. The sector’s trajectory over the next five years will be shaped by how effectively companies balance innovation, sustainability, and scale in an increasingly competitive global market.
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