Since agriculture is a weighty contributor to the Indian GDP (almost 15%), it makes a fascinating study of the companies associated with the sector as investment options. Today, we want to focus on the fertilizer industry, which is critical for bolstering the country’s agricultural output. As India’s food production rises, interest in the fertilizer companies is growing simultaneously.
Fertilizer is an essential sector supporting India’s agricultural growth. Indian fertilizer companies primarily manufacture under three major categories of Urea, Diammonium phosphate (DAP), and complex fertilizer, with Urea production being the largest among the three categories.
Fertilizer production in India
Investor needs a holistic idea of the industry to decide whether or not to diversify into a segment. India is a prominent fertilizer consumer and manufacturer with a market value of Rs 858 billion in 2021. The market value is expected to grow at a CAGR of 4.8% from 2022 to 2027 to become Rs 1,131 billion by 2027. Although the impact of Coronavirus was low in the Indian market, the fertilizer segment recorded significant labour and raw material crunch. However, the government’s initiative to keep the supply of fertilizers intact helped promote demand in the industry. India is the second-largest consumer of fertilizers globally, with an annual consumption of 55.0 million metric tons. Among the different categories of fertilizers, Urea consumption was the highest, with 33 million metric tons in 2020.
Key market trends
Increase in agricultural production
The farm sector’s gross value addition (GVA) has grown in the last two years. It was 3.6 in 2020-21 and 3.9 in 2021-22.
Increase in production of DAP and complex fertilizers
Both segments have recorded healthy growth in the last few years, with DAP production reaching 3.9 million metric tons and complex fertilizers touching 9.0 million metric tons production in 2019. It helped lower the import of DAP.
The Indian fertilizer landscape is competitive with several prominent players in the domain.
Trending Fertilizer Stocks in 2022
We have prepared the following list primarily based on the market capitalisation of each company. Investors must perform due diligence regarding each stock before investing in them.
The company started operating in 1960 as a collaboration between IMC and Chevron companies of the USA and EID Parry from India. It is a top agri-solution provider in the country, offering various products and services across the farming value chain.
The company has a market capitalisation value of Rs 23807.90 crore.
They have 16 manufacturing sites and a dealer network of 20,000 across the nation.
They have done well on the revenue front in the quarter ending on September 20, 2022, recording 34% growth over the revenue of the same quarter last year.
Check out Coromandel International share price.
Chambal Fertilisers and Chemicals
Chambal Fertilisers and Chemicals is a critical player with a market capitalisation of Rs 14,324.82 crores. With a yearly manufacturing capacity of 1.5 million tons, it is the largest producer of Urea in the private segment. The company also produces DAP fertilizers.
Chambal Fertilisers has a nationwide distribution channel of 3,700 dealers and 50,000 merchants.
During the second quarter of FY22, ending on September 30, 2021, the company’s net profit was Rs 5.1 million against Rs 4.4 billion during the same quarter last year, a growth of 15.8%.
Ready to invest? Track Chambal Fertilisers and Chemicals share price.
Gujarat Narmada Valley Fertilisers and Chemicals (GNFC) is a Government of Gujarat undertaking. The company was set up in 1976 in Bharuch (Gujarat), the company mainly manufacture Urea and Nitrophosphate, under the brand NARMADA. The company has a market capitalisation value of Rs 6,240.21 crore.
Since the stock price keeps changing, track live GNFC share price updates before investing.
Dharamsi Morarji Chemical Company
It is a multi-product, multi-location company manufacturing a wide range of speciality chemicals in medicines, detergents, dyes, and fertilizers. They are also the first Indian firm to produce sulphuric acid and phosphate fertilizers.
The company is a small-cap company with a Rs 992.98 crore market capitalisation. Learn more about Dharamsi Morarji Chemical Companys share price before investing.
They are one of the leading Indian phosphatic fertilizer manufacturers like single super phosphate (SSP) and produce oleum, nitrogen, phosphorous, and potassium (NPK), de-oiled cake, and soya oil.
The company’s net profit grew 101.1% to Rs 227.2 million in the quarter ending on September 30, 2021, against Rs 113 million during Q2 of 2020.
The company has a market capitalisation of Rs 583.88 crore.
Track Rama Phosphate share price live.
The list only offers a glimpse of a few fertilizer manufacturing companies. While investing in any stock is a personal choice, fertilizer shares can be an excellent choice to diversify your portfolio. We recommend that investors conduct due diligence before investing in any investing instrument. This list is for educational purposes and not recommendations for buying or selling.
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Disclaimer: “This blog is exclusively for educational purposes and does not provide any advice/tips on Investment or recommend buying and selling any stock”