Global overcapacity amid no major recovery in demand, continues to weigh heavily on the operating rates and profitability of petrochemical companies worldwide. In the domestic market, the commissioning of new capacities coupled with an influx of low-cost imports has compressed margins for petrochemical producers, despite resilient local demand. This challenging landscape is likely to persist in the near to medium term.
Exhibit: Trend in industry revenues and revenue growth
Source: ICRA Research; Data for ICRA’s sample; ICRA’s sample set for the sector does not include
large diversified players such as Reliance Industries, GAIL, and IOC as performance of other
segments would distort the performance trend of the former