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Amid robust domestic demand, comfortable profitability and strong balance sheets, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral outlook on the Indian chemicals sector for FY24. Besides, the rating agency maintained a Stable Rating Outlook on its rated chemical portfolio for FY24.

According to the report, chemical sector is likely to witness single digit revenue growth in FY24 in view of a robust demand in domestic markets along with strong fundamentals within end-use industries supporting volumes, even as the export demand faces headwinds and a moderation in prices tempers growth rate. 

Ind-Ra further noted that companies with a higher exposure towards sectors such as pharma, agrochemicals and FMCG are likely to witness a better demand environment, while export-focused organic chemicals and dyes players could witness some softness in demand. 

The rating agency further said that demand in the European Union (EU) is expected to remain weak over FY24, as the region continues to grapple with inflation and slowdown; while demand in the US could also remain subdued, affecting India’s exports.