Competition Analysis of the segment:

Porters Five Forces:

Rivalry (medium): Chemical industry is highly fragmented with intense rivalry amongst companies.
Since, 100 per cent FDI is allow hence domestic companies face stiff competition from foreign
competitors as well. International companies may also dump chemicals at low price.

Threat of New Entrants (low): Huge capital requirements and patent protection are significant
barriers. Other barriers include - R&D and personnel requirements.

Threat of Substitutes (low): Buyers tend to have specific chemical requirements. There are no direct
substitutes for a specific chemical requirement.

Bargaining power of buyers (medium): Small chemical companies rely on supplies from larger
plants, or petrochemical units. Inputs for a chemical plant cannot be easily substituted.

Bargaining power of suppliers (medium): Customers have multiple sources of supply .Niche
specialty chemicals have some pricing power.

Industry Leaders by Current Financial Numbers

Market Capitalisation: United Phosphorous Limited(INR 36,347 Cr)

Net Sales: Tata Chemicals (INR 10,649 Cr)

Net Profit: United Phosphorous Limited (INR 705 Cr)

Taxes: Pidilite (INR 310 Cr)

Historical Financial Analysis (Refer exhibits for detailed data)

Revenue: The revenue of the top five companies in this segment has shown a constant and steady
increase over the past five years.

Expense: Like the revenue, operational and other expenses have also increased in a proportion
greater than that of the revenue.

Profit and Taxes: Due to varying operational expenses and an inconsistent tax structure, the profit
growth and Tax expenses have been very inconsistent in the past five years. The introduction of GST
can bring a positive effect on the chemicals industry. The current tax for the paints and
industrial chemicals sector is between 24 per cent and 26 per cent. If the government agrees to cap
the GST tax slab in line with the recommendation of the chief economic adviser (18-20 percent), it will
have strong positive impact on the sector.

Competitive Advantage of Tata Chemicals

Strong R&D set up and patented products in both India (Tata Chemicals Innovation Center)
and Africa.
The brand name of Tata signifies trust and customer loyalty.
Export sales in diverse regions of Europe, East Africa, South East Asia, and the Middle East.
String brand equity and top brand recall in the industry.
Has a strong workforce of around 5000 employees.
Exhibit Financial Data(Source : moneycontrol.com)
Exhibit Financial Data(continued)

Revenue(Cr.)
Tata
chemic PIDILI
Year als UPL BASF TE GHCL
2012 8071 3382 3773 2957 1972
2013 8667 4022 4236 3528 2246
2014 8826 5081 4853 4103 2356
2015 10236 5532 5088 4658 2526
2016 10853 6117 5143 5038 2722

Profit(Cr.)

Year Tata UPL BASF PIDILI GHCL

chemic TE
als
2012 586 227 100 334 117
2013 643 208 114 460 115
2014 436 415 127 468 116
2015 637 463 -66 501 183
2016 594 705 4.45 703 256

Expenditure(Cr.)
Tata
chemic PIDILI
Year als UPL BASF TE GHCL
2012 7407 3152 3371 2414 1787
2013 7901 3776 3765 2783 1948
2014 8105 4713 4232 3283 2047
2015 9422 4994 4810 3754 2099
2016 10005 5595 4922 3738 2172

Taxes(Cr.)
Tata
chemic PIDILI
Year als UPL BASF TE GHCL
2012 177 79 48 109 1.17
2013 182 89 54 158 25.13
2014 132 136 66 162 33
2015 216 117 1 166 74
2016 207 140 0 310 121