The profitability of basic chemical players remains moderate with continued oversupply and global demand headwinds. Despite a steady domestic demand, dumping of some of these chemicals by major overseas producers due to continued weak demand prospects in the other markets is likely to keep the margins under pressure in the near term.

• Demand outlook for basic chemicals remains subdued. Tepid growth of the global economy, increased competition and oversupply from China, geopolitical challenges and volatility in crude prices are exerting pressure on basic chemicals with a host of products witnessing low realisations and profitability.
• The caustic soda (CS) realisations remained moderate in H1 FY2026; though improved over FY2025 levels. However, increase in global production, excess capacities in India, and negative chlorine realisations are exerting pressure on Electro Chemical Units (ECU) realisation for CS manufacturers.