Chemicals Sector Check - Opportunities Galore For Indian CDMO Player: HDFC Securities

HDFC Securities Institutional Equities

The contract development manufacturing organisation and contract research and manufacturing services sectors in India are experiencing significant shifts and presenting new opportunities.

There has been a notable uptick in inquiries from Japan, while challenges in Europe are expected to drive business toward India due to its cost advantage coupled with the 'China plus one' strategy adopted by multi national companies in CDMO and CRAMS.

China's increased chemical capacity and market strategy of dumping chemicals into market has implications for global supply dynamics, particularly with its heavy reliance on government incentives.

Further, the battery chemical sector is expected to see robust demand. However, challenges such as the 'Red Sea' issue are impacting timelines and costs could intensify with the demand rebounding, especially in the U.S. and Europe.

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