India's share in global specialty chemicals market to double in 5 years: Crisil
According to Crisil, the Indian specialty chemicals industry would outperform its Chinese counterpart and double its worldwide market share to 6% by 2026, up from 3-4% in FY21. This will be fueled by robust revenue growth of 18-20% this fiscal year and 14-15% the following year, compared to single-digit growth in the prior two fiscal years.
Growth will be fueled by two factors: significant export tailwinds due to a shift in the global supply chain caused by vendors' China+1 policy and demand recovery in local end-user segments.
Meanwhile, a boost in demand has prompted companies to increase their capital expenditure projections. As a result, capital spending will increase by 50% to Rs. 15,000 crore (US$ 1.97 billion) during the next two fiscal years, compared to fiscal years 2020 and 2021. Backward integration, import substitution, and meeting growing demand for exports will account for a significant percentage of this spending. Healthy cash flow will reduce the need for additional debt to fund capex and working capital, allowing credit profiles to improve.
Domestic revenue is expected to rise 18-20% this fiscal year, owing to a rebound in demand from major end-user industries such as agrochemicals, dyes, foods, and perfumes (55-60% of total demand). Domestic growth is predicted to be strong in the coming fiscal year, at 13-15%.
Exports are predicted to grow 18-20% this fiscal year and 10-12% the following year.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.