New Delhi, Oct. 2 -- India's chemicals sector has begun to recover from the downturn of the past few years, but returns on capital could take another two to three years to improve as companies work to utilise large capacities built during the previous investment cycle, according to an Equirus Capital sector report.

The September 2026 report, titled "Indian Chemicals: The Reset," said signs of recovery are now visible in company earnings, although the improvement in profitability has so far been stronger than the recovery in asset utilisation.

"We see the sector on a path to recovery, with occasional speed bumps and the odd nitro boost along the way," Equirus said. It added that "the margin recovery has started showing, though the return...