Whalesbook
The Confederation of Indian Industry (CII) has appointed a new leadership team for the 2026-27 term, with R. Mukundan, Managing Director and CEO of Tata Chemicals, taking over as President. Shashwat Goenka, Vice Chairman of the RP-Sanjiv Goenka Group, will serve as Vice President, and Suchitra K. Ella, Co-founder and Managing Director of Bharat Biotech, is the President-Designate. This selection brings together leaders from the chemical manufacturing, diversified industrial, and biotechnology sectors, suggesting a strategic focus on shaping India's industrial and economic policy.
New Leadership Team
R. Mukundan brings over three decades of experience in the chemical sector. Shashwat Goenka leads a group with diverse interests in power, green energy, chemicals, and retail. Suchitra K. Ella is recognized for her contributions to biotechnology and healthcare, notably in vaccine development. Their combined expertise is expected to foster policy alignment across foundational industries, advanced technology, and essential services, aligning with India's critical growth sectors.
Industry Context and Financials
The chemical industry is poised for significant growth, with projections indicating it will account for 18.31% of manufacturing value added by 2026. Government initiatives like 'Make in India' and Production Linked Incentive (PLI) schemes are boosting manufacturing competitiveness. Specialty chemicals, driven by demand in pharmaceuticals, electronics, and renewables, are a key growth area, with India aiming for increased exports. Budget 2026 also includes support for chemical parks and MSMEs.
Tata Chemicals, a major player in soda ash and specialty products, has a market capitalization around ₹19,411 crore. While it has shown poor sales growth over five years and low return on equity, Morgan Stanley recently upgraded its stock to 'Overweight' citing recovery signs.
CESC Ltd., a flagship of the RP-Sanjiv Goenka Group, has a market capitalization of approximately ₹24,125 crore to ₹247.36 billion. Its P/E ratio is around 15.17x-15.68x, and it holds a strong analyst consensus. CESC's integrated utility model serves over 3 million consumers and has shown decent sales and profit growth recently.
The broader Indian manufacturing sector aims to reach 25% of GDP by 2035, supported by ongoing policy and infrastructure development for global competitiveness, including a proposed 'Made in India Brand Scheme'.
Assessing the Risks
Despite the broad industry representation, potential risks exist. The chemical sector is vulnerable to input cost volatility and supply chain disruptions. Tata Chemicals faces challenges with its historically weak sales growth, low return on equity, and fluctuating P/E ratios, alongside a low interest coverage ratio.
CESC operates under significant regulatory oversight, with potential impacts from policy shifts on tariffs. While analysts often maintain positive ratings, past downgrades indicate potential concerns. The RP-Sanjiv Goenka Group's diversification, while a strength, can also mask individual unit weaknesses. CESC's high Debt/Equity ratio of 1.17 highlights its leveraged position, a vulnerability during economic slowdowns or rising interest rates.
Initiatives like the 'Made in India Brand Scheme' and PLI, while beneficial, could intensify competition and lead to overcapacity if not managed effectively. Furthermore, reliance on government policy introduces uncertainty if political or economic conditions change.
Future Outlook
Analysts project strong growth for the chemical industry, with India set to become a major exporter. Continued policy support and foreign direct investment are expected for the manufacturing sector, driven by schemes like PLI and advanced manufacturing initiatives. The new CII leadership is expected to advocate for policies supporting sustainable manufacturing, technological adoption, and export competitiveness across its member industries.