"Innovative Engineering Polymers Transform the Manufacturing Landscape"

📖 The Scoop

Why include polymers industry stock in your portfolio?

The global polymer market is expected to grow in the coming years, driven by increasing demand from various end-use industries and the development of new polymer technologies. Investing in polymer industry stocks could provide exposure to this growth potential. Including polymer industry stocks in your investment portfolio can offer several potential benefits. 

Adding polymer industry stocks to your portfolio can help diversify your holdings and reduce overall risk. By investing in a variety of different industries, you can mitigate the impact of a downturn in any one sector. Many polymer companies pay dividends to their shareholders, which can provide a source of passive income.

The polymer industry is characterized by solid fundamentals, such as consistent product demand, high barriers to entry, and a relatively stable market. This can provide a measure of stability to your investment portfolio, even during times of market turbulence. Additionally, as the market grows and the value of your stock investments increases, you can realize capital gains.

When is the best time to put money into this industry?

The trajectory set for India's economy by the previous year's budget has been reinforced in the Union Budget 2022-23. The ADB forecast remains based on a normal monsoon which, coupled with rising wheat prices, is expected to boost agriculture output and improve farmers' income. The capex budget has been increased by 35.4% over the current year's budget predictions, amounting to 4.1% of GDP, fueling Gati Shakti's seven engines, bridging the infrastructure gap and making life easier. 

The capex generated by the government will also encourage private investment. The Production Linked Incentive (PLI) schemes in 14 sectors will further encourage private investment to boost export growth and allow for feasible import substitution. India's Goods and Services Tax (GST) revenues crossed the 1.5 lakh crore market for the first time. They touched a new record high of 1.67 lakh crore in April 2022 because of increased compliance, better tax administration and improved economic activity despite the escalating geopolitical conflict in Russia, and Ukraine has a positive impact.

How are polymers companies regulated?

Polymer companies are regulated by various governmental agencies and organizations, depending on the specific products they produce and the regions in which they operate. Some of the most common regulatory bodies include Environmental protection agencies, such as the US Environmental Protection Agency (EPA) and the European Environment Agency (EEA), which regulate the production and use of polymers to ensure they do not harm the environment. This includes regulations on the release of hazardous chemicals, the disposal of waste, and the management of plastic waste.

Health and safety regulators, such as the US Occupational Safety and Health Administration (OSHA) and the European Chemicals Agency (ECHA), ensure that the production and use of polymers do not pose a risk to human health and safety. Consumer protection agencies, such as the US Consumer Product Safety Commission (CPSC) and the European Consumer Protection Cooperation (CPC), regulate the safety of consumer products made from polymers, including toys, appliances, and packaging. International trade organizations, such as the World Trade Organization (WTO), regulate the trade of polymers and polymer-based products, ensuring fair and open competition among producers and protecting intellectual property rights.

What is the future of this industry?

The future of the polymer industry is expected to be characterized by continued growth and innovation, driven by increasing demand from various end-use industries and the development of new polymer technologies. Some key trends shaping the future of the polymers industry, like Sustainability, are becoming an increasingly important issue for the polymers industry. 

Advancements in polymer technologies are expected to play a major role in shaping the future of the polymer industry. Companies are investing in developing more eco-friendly polymer products and processes. This includes the use of biodegradable polymers, recycled polymers, and the development of more efficient and sustainable production processes. This consists of developing new polymers with improved properties, such as increased strength and durability, and using digital technologies to enhance production efficiency and Sustainability. 

The demand for polymer-based products is expected to continue growing in the coming years, driven by increasing demand from emerging economies, particularly in Asia, and the growing importance of polymers in the construction, automotive, packaging, and electronics industries. The polymers industry is also subject to ongoing regulatory changes, particularly regarding Sustainability and environmental protection. Companies will need to adapt to these changes to remain competitive and ensure the long-term viability of their operations.

Al Zayd Corp

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Islamic Finance Research

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Self-Published Research Magazine

Author: Zayd Iqbal Haji

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This investment research report is not an acquisition recommendation and is not misinterpreted for investment consultation as it is a piece of information about the above company. All design content is copyrighted, and references are from the company's annual and RBI reports.

Note: 

Analysts certify that all views expressed in the magazine accurately reflect the theories from the company's annual reports. Moreover, not a part of the investment recommendation or will not be directly or indirectly related to specific recommendations or views expressed in this report. 

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