The Russia-Ukraine crisis has rattled equity markets globally, causing a ripple effect on commodity prices, especially crude oil. The record surge in crude prices, the highest since the financial crisis of 2008, had a massive impact on the chemical industry, which utilises crude oil or its derivatives as key ingredients for making various products.
The Brent crude price touched almost $140 a barrel intraday on March 7 after the U.S. and its Western allies imposed a flurry of sanctions on Russia, including a ban on oil exports, which fuelled supply concerns. The unprecedented rise in crude prices dented chemical stocks’ performance on the domestic bourses, with shares of Alkyl Amines, Deepak Nitrite, Balaji Amines, Aarti Industries and Navin Fluorine International falling up to 20% on a year-to-date basis.
Despite these odds, several stocks from the chemical sector have given massive returns to patient investors over a long-term period. Shares of Alkyl Amines, Deepak Nitrite, Privi Specialty Chemicals, Thirumalai Chemicals, Aarti Industries, Navin Fluorine International and Balaji Amines gained more than 1,000% in the past 10 years. The homegrown chemical manufacturer Alkyl Amines Chemicals has been a stock to watch out for as it has delivered nearly 6,000% during the last eight years as compared to 160% growth in the BSE Sensex.
Alkyl Amines delivered 6,000% returns in 8 years
Shares of Alkyl Amines Chemicals Limited (AACL) have rallied 5,950% in the last eight years, with its shares jumping from ₹49 apiece on March 16, 2014, to ₹2,963 intraday today. To put it in perspective, an investment of ₹10,000 in the firm in March 2014 would have turned into ₹6.05 lakh today.
The stock is once again in the limelight as the recent slump in crude prices has improved the outlook for chemical stocks. AACL shares have risen 2.56% in the last two sessions, mirroring weakness in the price of Brent crude which slipped below $100 a barrel.
On Thursday, Alkyl Amines shares opened higher at ₹2,948.80 against the previous close of ₹2,904.70 and gained as much as 2% to hit a high of ₹2,963.3 on the BSE. At 11 AM, AACL's share price was up 1.16% at ₹2,938.50. In comparison, the BSE benchmark Sensex was trading at 57,820, up 1,003 points, or 1.77%.
The midcap stock, with a market capitalisation of ₹15,007 crore, is currently trading lower than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. The share has fallen 2% in a week, 5% in the past month, and 17% since the beginning of the calendar year 2022. In the last one year, it has gained 38%, while it gave a return of 860% and 1,890%, over a three-year and five-year period, respectively.
AACL has been in the business of manufacturing and marketing various aliphatic amines, amine derivatives, and other speciality chemicals for the last 30 years. It is a global supplier of amines and amine-based chemicals to the pharmaceutical, agrochemical, rubber chemical, and water treatment industries, among others. The company has three manufacturing sites with 12 production plants and related utilities at Patalganga and Kurkumbh in Maharashtra and Dahej in Gujarat.
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