Another chemical specialist that has done well is Mumbai-based Aarti Industries Ltd., which manufactures more than 200 chemicals in its 17 factories. Established by first generation technocrats in 1984, its core business is benzene derivatives, used in paints, medicines, shampoos, agriculture and even airplanes. More than 60% of the production is consumed on site. Net revenue increased at a CAGR of 18.87% to ₹6,999.9 crore in three years to FY22. Profit increased by 38.53% to ₹1,307 crore. Market cap increased by 36.49% CAGR to ₹25,895,000,000. This values the stake of the promoter group at ₹11,444 crore. Between 2019 and 2021, it operationalized four facilities for diversification and reception of long-term contracts. “Our capex for FY22 was ₹1,300 crore, in line with our plans. We are seeing an increase in capacity and expect most plants to reach 70-90% utilization by FY24. We remain committed to investing over ₹3,000 crore by FY24,” says Rajendra Gogri. With this capability, Aarti’s revenue can be catapulted 2.5 to 3.5 times and EBIT and PAT three to four times from FY21 to FY27. Gogri says Aarti Industries is seizing the opportunity arising from import substitution and supply chain diversification by global majors and investing in product diversification, capacity expansion and product upgrading specialty chemicals and pharmaceuticals.
DCM Shriram, part of the more than 100-year-old DCM Group, is also running at full speed, in part thanks to initiatives taken to integrate operations. “Our chemicals business grew by 23% CAGR from ₹885 crore in FY17 to ₹2,498 crore in FY22. chlorine, hydrogen, aluminum chloride and bleach stable. The company is India’s second largest chlor-alkali producer with a capacity of 1,869 tonnes per day (TPD). An ongoing expansion of 850 TPD at Bharuch will make it the largest single-site caustic facility in the “We are in the future integrating chemical activities and implementing projects to manufacture epichlorohydrin, an import substitute used to manufacture resin, hydrogen peroxide and aluminum chloride, and other projects that are part of the circular economy, with an expenditure of ₹2,800 crore This will add significant scale and new sources revenue,” says Vikram S. Shriram, Vice Chairman and Managing Director of DCM Shriram on a 66.52% stake is valued at ₹10,233 crore.
Gujarat Fluorochemicals (GFL) is another major traditional chemical industry reaping favorable winds. GFL is part of INOXGFL (Inox Group was split between brothers Pavan and Vivek Jain in November 2021. Vivek Jain’s group is now called INOXGFL Group) with diversified business segments including fluoropolymers, specialty, wind energy and renewable energies. Net revenue grew at a CAGR of 13.15% to reach ₹3,953,000,000 in three years to FY22. 10 from ₹3,186 crore in FY2020 to ₹30,531 crore. The stake of the promoter group, led by Vivek Jain, is valued at ₹20,176 crore. GFL is also tapping into the emerging electric vehicle opportunity by investing ₹2,500 crore over three years to manufacture PVDF electrode binders, battery chemicals, LiPF6, additives, electrolyte formulations and battery cases in a new integrated complex of battery chemicals.
Then there’s the interesting turnaround story of the Sanmar Group and Chemplast Sanmar, promoted by Fairfax, maker of specialty resins, chloro chemicals, hydrogen peroxide and custom chemicals, which left the stock exchanges in 2012 due to the deterioration of his fortune. It is re-listing in August 2021 with a ₹3,850 crore IPO and expanding – debottlenecking PVC resin unit, setting up 35,000 MT capacity PVC paste unit at Cuddalore and a versatile custom fabrication facility. The objective is to exploit the import substitution opportunity. Net revenue increased by 67.41% CAGR in three years from ₹1,254.34 crore to ₹5,885 crore. The market capitalization is ₹7,585 crore. The developer’s stake is valued at ₹4,171 crore.