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Best Agriculture Stocks In India

01 January 20246 mins read by Angel One
Agriculture is a crucial sector of the Indian economy, employing nearly half its population and contributing significantly to its GDP. Here are some of the best agricultural stocks you can invest in.
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Agriculture plays a significant role in India’s economy, employing half its workforce and contributing 20.2% of its GDP. With a large and growing population, there is a high demand for food and agricultural products in the country, making agriculture a critical sector for investment.

Investors can gain exposure to the Indian agriculture sector through various means, including investing in agriculture stocks listed on the Indian stock exchanges. These stocks represent companies that are involved in multiple aspects of the agriculture value chain, such as crop production, seeds and fertilisers, farm equipment, food processing, and logistics.

Read on to learn more about India’s top 10 agricultural stocks based on Return on Equity and EBITDA margin. But before that, let’s understand what agricultural stocks are.

What Are Agriculture Stocks?

Agriculture stocks are companies integral to the agricultural industry, spanning farming, agribusiness, and equipment manufacturing. These stocks represent diverse sectors like crop cultivation, livestock, agrochemicals, seeds, and irrigation technology. Investing in agriculture stocks enables participation in the growth of the vital global food production sector. Agriculture stocks offer investors an opportunity to engage with the dynamic and essential field of agriculture, which is crucial for sustaining the world’s food supply.

Top 10 Agriculture Stocks In India in 2024

Stock Market Capitalisation 

(₹ Crore)

P/E Ratio (x) 1 Year Return (%) Return on Equity (%) Debt to Equity Ratio (x) EBITDA Margin (%)
Fertilizers and Chemicals Travancore Ltd 45,657.40 74.48 381.64 63.33 144.57 14.06
UPL Ltd 42,476.89 11.90 -26.90 11.03 67.70 19.66
Coromandel International Ltd 33,262.05 16.52 25.36 28.22 4.96 10.31
Bayer Cropscience Ltd 23,694.82 31.25 14.98 28.96 2.71 20.57
Gujarat Narmada Valley Fertilizers & Chemicals Ltd 10,973.34 7.46 16.96 17.22 0.02 21.15
PI Industries Ltd 57,005.13 46.36 10.87 18.46 0.65 25.69
Godrej Agrovet Ltd 9,674.93 32.05 7.60 11.12 52.23 6.96
Gujarat State Fertilizers and Chemicals Ltd 7,278.19 5.75 40.34 10.63 0.02 15.10
Jain Irrigation Systems Ltd 4,696.72 5.67 103.81 18.29 75.17 19.79
Dhanuka Agritech Ltd 4,056.02 17.37 26.58 23.10 3.16 18.54

Note: The above list of agricultural stocks is dated November 24, 2023. These stocks are sorted from highest to lowest on the basis of the market capitalisation. The following parameters were used to get the list:

  • Return on Equity 
  • EBITDA Margin 

Now, let’s look at these stocks briefly.

  1. Fertilizers and Chemicals Travancore Ltd (FACT) 

Founded in 1943, FACT is an Indian central public sector undertaking headquartered in Kochi, Kerala. It’s the first fertiliser manufacturing company in independent India and the largest Central Public Sector Undertaking (CPSU) in Kerala. It operates under the ownership of the Government of India and the administrative control of the Ministry of Chemicals and Fertilizers. 

 

FACT has two production units in Kerala and manufactures a range of products, including ammonia, sulphuric acid, ammonium sulphate, caprolactam, and complex fertilizers. The company has also diversified into petrochemicals and formed a joint venture, FRBL, for manufacturing building products using phosphogypsum.

  • UPL Ltd 

Established in 1969 as United Phosphorus Limited, UPL Limited is an Indian multinational company manufacturing and marketing agrochemicals, industrial chemicals, chemical intermediates, and speciality chemicals. It also offers pesticides and operates in both agro and non-agro sectors. 

Headquartered in Mumbai, Maharashtra, UPL is the fifth-largest generic agrochemicals company globally, operating in over 150 countries. Its product range includes phosphorus-based products, with a significant presence in fungicides, herbicides, insecticides, and plant growth regulators.

  • Coromandel International Ltd

Founded in the early 1960s, Coromandel International Limited is an Indian crop protection corporation headquartered in Hyderabad. It produces fertilisers, pesticides, and speciality nutrients. Coromandel operates a retail business in several Indian states and is part of the Murugappa Group. It has 16 manufacturing facilities across India and offers products under various brands like Gromor and Godavari. The company is also recognised for its contributions to agriculture and environmental science. 

  • Bayer CropScience Ltd 

A subsidiary of Bayer AG, Bayer CropScience Ltd manufactures and distributes pharmaceutical, consumer health, and crop protection products. Its portfolio includes fungicides, insecticides, herbicides, plant growth regulators, corn seeds, and hybrid seeds, among other products. Headquartered in Thane, Maharashtra, India, the company operates manufacturing sites in Hyderabad, Bengaluru, Udaipur, Himatnagar, and Silvassa and markets its products globally. 

  • Gujarat Narmada Valley Fertilizers & Chemicals Ltd  

Founded in 1976, GNFC is an Indian manufacturer of fertilisers and chemicals. Jointly promoted by the Government of Gujarat and Gujarat State Fertilizers and Chemicals, it’s located in Bharuch. GNFC produces urea, nitrophosphate fertilisers, neem-based products, and industrial chemicals like methanol and acetic acid. It also has a subsidiary, nCode Solutions, that provides digital certificates for the government of India. 

  • PI Industries Ltd

PI Industries is a leading producer and supplier of agrochemical products, headquartered in Gurugram, Haryana, India. The company offers various products, including insecticides, fungicides, herbicides, speciality products, plant nutrients, and other plant fertilisers. 

Known for its strong focus on R&D, PI Industries provides custom synthesis and manufacturing services, distribution services, regulatory services, application development, and marketing solutions. Its specialised product brands include Biovita Granules, Biovita Liquid, Super Spreader, and Humesol. PI Industries has a global distribution network and maintains operational locations in countries such as Japan, Germany, and China​.

  • Godrej Agrovet Ltd 

Part of the Godrej Group, Godrej Agrovet Limited operates in the animal feed and agribusiness sectors. With a significant turnover, it is one of India’s biggest players in the animal feed business. The company’s joint venture, Godrej Tyson Food, focuses on poultry farms and meat processing, and it’s also a major developer of oil palm plantations in India. Additionally, Godrej Agrovet has a strong presence in agrochemicals, with market leadership in various segments. 

  • Gujarat State Fertilizers & Chemicals Ltd (GSFC)

GSFC is an Indian chemicals and fertilisers manufacturer owned by the Government of Gujarat. Founded in 1962 and headquartered in Vadodara, Gujarat, it produces a variety of fertilisers and industrial products. Fertilisers like diammonium phosphate, ammonium sulfate, and urea make up over 60% of its revenue, with the rest coming from industrial products like caprolactam, nylon 6, melamine, and MEK oxime. In 2012, GSFC established a wholly-owned subsidiary, GSFC AgroTech Limited (GATL)​​​​.

  • Jain Irrigation Systems Ltd

An Indian multinational conglomerate based in Jalgaon, Jain Irrigation Systems (JISL) offers a diverse range of products, including drip and sprinkler irrigation systems, PVC and PE piping systems, plastic sheets, greenhouses, bio-fertilizers, solar power, and water heating systems, among others. JISL is also involved in processing dehydrated vegetables, spices, and fruits. The company employs over 12,000 people, operates 33 manufacturing plants worldwide, and was ranked 7th on Fortune’s ‘Change the World’ list in 2015​​​​.

  • Dhanuka Agritech Ltd

Dhanuka Agritech Limited, established on February 13, 1985, is a public limited company in Central Delhi. It specialises in manufacturing various pesticides, with products including herbicides, fungicides, insecticides, miticides, and plant growth regulators. The company has seen a significant increase in its book net worth and operates with revenues exceeding ₹500 crores​​.

Overview of the Agriculture Industry in India

India is a global agricultural powerhouse, boasting the foremost positions in milk, pulses, and spices and possessing the world’s largest buffalo herd. Crucial to both economic and social development, the agricultural sector supports nearly 75% of Indian families and significantly contributes to the GDP.

Key facets of this industry include ranking second globally in the production of rice, wheat, cotton, and more, with 195 million hectares under cultivation, of which 63% relies on rainfed and 37% on irrigated methods. However, challenges persist, including limited knowledge, inadequate rural infrastructure, credit access issues, small landholdings, outdated farming practices, and water scarcity. 

Despite challenges, opportunities for growth and innovation emerge, encompassing modern farming practices, improved seeds, organic farming, and efficient irrigation. The government plays a pivotal role by introducing supportive schemes like PM-KISAN and e-NAM. 

Looking ahead, India’s agricultural sector is poised to contribute significantly to bioethanol, food security, energy, and decarbonisation goals, necessitating adaptation to new technologies and strategies.

Factors To Consider Before You Invest in Agriculture Stocks

  1. Market Conditions: Assess the current state of the agricultural market, including crop prices, demand-supply dynamics, and global trends. Stay informed about market fluctuations that may impact the sector.
  2. Government Policies: Understand and monitor government policies related to agriculture, as they can significantly influence the sector. Policies on subsidies, regulations, and trade agreements can impact stock performance.
  3. Weather Patterns: Consider the impact of weather conditions on crop yields and prices. Unpredictable weather patterns can risk agricultural stocks, so staying informed about seasonal variations is crucial.
  4. Commodity Price Trends: Monitor commodity prices, as they directly affect the revenues of agricultural companies. Fluctuations in the prices of crops, fertilisers, and other inputs can impact the profitability of these stocks.
  5. Sustainability Practices: Consider the sustainability practices of the agricultural companies. Increasingly, investors are prioritising companies with environmentally responsible and socially conscious practices, which may contribute to long-term success.
  6. Technology and Innovation: Assess the technological adoption and innovation level in agricultural companies. Those leveraging advanced technology may have a competitive edge and potential for long-term success.

Conclusion

India is one of the world’s largest agricultural producers and has a robust agriculture sector. Agriculture stocks in India can be an attractive investment option for those looking to invest in the Indian stock market. So, if you are one of them, open a demat account with Angel One today and start investing!

It is important to note that investing in the stock market involves risk, and it is always advisable to consult a financial advisor before making investment decisions. Additionally, doing your own research and analysis before investing in any stock is important.

Disclaimer: This blog is exclusively for educational purposes. The securities quoted are examples and are not recommendatory.

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