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Chemical industry
- 1. Indian Chemical Sector rejoiced in Today’s Trading Session The Indian chemical sector is rejoicing in Dalal Street today. Major chemical companies like Chemfab Alkalis, Tirumalai Chemicals, Kiri Industries, Philip Carbon, IGPL, Meghmani Organics etc have all surged more than 5 per cent today. The much anticipated Constitution Amendment Bill - Goods and Services Tax, GST - was passed in the Parliament recently and it will most probably be implemented by the month of April 2017, replacing all indirect taxes that are currently levied on goods and services by the Centre as well as States. This implementation will surely improve the ease of doing business in the country. The chemical sector of the country is overburdened with the multifaceted indirect taxation system. The current tax rate prevailing is between 24 per cent and 26 per cent. If the government agrees to cap the GST tax slab by around 18 to 20 per cent, it will have massive positive impact on the sector. The trickle-down and cascading effects of the new tax structure in other sectors like logistics, manufacturing, automotive along with consumer products too will impact the chemical and polymer industry. Indian chemical industry has been performing significantly well since last few years on domestic and the global front too. India is an important player in the
- 2. global trade of chemicals, plastics as well as allied products. There are tremendous scopes to increase its share in the world trade. This is also reflecting in the form of overall increasing exports. However, most of the players performance remained weak in the Financial Year 2016, with profit reducing on account of steep fall in chemical prices and inventory losses. But in Financial Year 2017, the companies in the sector are likely to give a better performance, as realizations across the chemical products are highly picking up. Significant growth in specialty chemical paired with petrochemical segment will also provide stimulus to the overall Chemical sector, as increasing consumption from the high end polymer industry along with other user segments will push it to garner a growth in double digits in the period of next 10 years. Implementation of GST will also play a major role in growth of the sector, as it will allow tax set offs across the production value-chain, which will finally resulting in a drop of the cascading effect of taxes and reduction in the overall production cost. Another factor adding zeal to the sector is the weakening of INR against US Dollars. The export oriented industry stands to gain a lot as a result of this factor. Share Price Performance Chemfab Alkalis share price closed at Rs 263.25, up by 19.99 per cent; Thirumalai Chemicals share price closed at Rs 623.00, up by 5 per cent; Kiri Industries share price closed at Rs 273.35, up by 10.48 per cent; Philip Carbon share price closed at Rs 222.15, 6.83 per cent; IGPL share price closed at Rs 201.75, up by 5 per cent and Meghmani Organics share price closed at Rs 38.25, up by 7.16 per cent.
- 3. Disclaimer The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal views of the research team. Users are advised to use the data for the purpose of information and rely on their own judgment while making investment decision. Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022 Disclosure Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment Advisory Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of MCX & NCDEX. We declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on for certain operational deviations. Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/ Research Analyst/ his Relative: Do not have any financial interest / any actual/beneficial ownership in the subject company. Do not have any other material conflict of interest at the time of publication of the research report Have not received any compensation from the subject company in the past twelve months Have not managed or co-managed public offering of securities for the subject company. Have not received any compensation for brokerage services or any products / services or any compensation or other benefits from the subject company, nor engaged in market making activity for the subject company Have not served as an officer, director or employee of the subject company Article Written by Nabarupa Kanjilal