Best Agriculture Stocks in India
(The stocks mentioned in the blog are as per Analyst Ratings and Market Capitalization)
India's agriculture sector plays a significant role in the country's development. Investing in agriculture stocks in India can provide numerous benefits and growth opportunities in the long run. With the rapid increase in India's population, the demand for food and agricultural products is expected to rise, consequently driving expansion within the industry.
In addition, the Government of India is implementing various initiatives and policies to support and promote the agricultural sector, such as subsidies, improved infrastructure and farmer welfare schemes.
In this blog, you will explore the best agriculture stocks in India that offer attractive investment opportunities.
Agriculture Industry in India - A Brief Overview
The agriculture sector in India is a major player worldwide and serves as the primary source of income for approximately 55% of the country's population. India boasts the world's largest cattle herd (buffaloes) and has the largest area to cultivate rice, wheat and cotton. It also ranks first in milk, pulses and spice production globally.
Additionally, India is the second-largest producer of fruits, vegetables, sugarcane, tea, farmed fish and sugar.
Despite experiencing a significant decline in its contribution to India's GDP from 1990-91 to 2022-23 due to industrialization, the agricultural sector yet managed to demonstrate an average CAGR of 4% over the past 5 years, as per the news.
In response to this decline, the Government of India set aside roughly 1.9% of the total Union Budget for Agriculture and Allied sectors for the fiscal year 2023-24. Around 1.3% is allocated to assist small and marginal farmers through the PM KISAN Yojana. A notable chunk, approximately 8.3%, went towards major subsidies, including those for food, fertiliser and petroleum.
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Best Agriculture Stocks in India 2024 as per Analyst Ratings
The following table mentions the best agriculture stocks, sorted as per analyst ratings. We have picked analyst rating as a criterion because such analysts run thorough market research and analysis before rating a stock-
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S.No. |
Best Agriculture Stocks in India (as per analyst ratings) |
BUY Analyst Rating (in %) |
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1. |
100 |
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2. |
91 |
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3. |
86 |
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4. |
72 |
*Our stock selection criteria for top stocks based on analyst ratings are mentioned at the bottom of this blog.
Top Agriculture Stocks in India in 2024 as per Market Capitalisation
Here is a table that represents the top agriculture stocks in India in 2024 according to market capitalisation:
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S.No. |
Best Agriculture Sector Stocks in India (as per market capitalisation) |
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1. |
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2. |
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3. |
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4. |
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5. |
*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.
Overview of Best Agriculture Stocks in India as per Analyst Ratings
Here is a comprehensive overview of the above-listed agriculture stocks as per both analyst ratings and market capitalisation:
1) Coromandel International Limited
Coromandel International Limited is one of the top agricultural solutions providers in India. The company began its journey in 1906 with the first fertiliser plant in Ranipet, Tamil Nadu. It mainly has 2 segments which include crop nutrition and crop protection. Under the crop nutrition segment comes fertilisers, organic nutrients and speciality nutrients.
On the other hand, the crop protection section includes insecticides, herbicides, fungicides, bio-products, etc. Moreover, the company is known as the world's biggest producer of neem-based bio-pesticides, a top marketer of organic fertilisers and boasts the country's largest agri-retail network with more than 750 stores.
2) PI Industries Limited
Incorporated in 1946, PI Industries Limited is a holding company headquartered in Haryana that manufactures and distributes agrochemicals. Its products include fungicides, pesticides, herbicides, plant nutrients, and speciality products. The company provides a wide range of services, including research and development services, molecule design, library synthesis, biological evaluation, etc.
Its custom synthesis and manufacturing solutions include plant engineering, structure elucidation and synthesis of impurities, safety data generation, waste categorization, and treatability studies. In addition to its operations in India, the company has a significant presence in other countries, such as Japan, Germany, and China.
3) Sumitomo Chemical India Limited
Founded in the year 2000, Sumitomo Chemical India Limited (SCIL) is an Indian-based company involved in manufacturing, importing and marketing products. These products are used for protecting crops, controlling rodents, fumigating grain, using biopesticides, managing environmental health, professional pest control and adding to animal feed.
The company mainly makes and sells household bug sprays, farming pesticides, public health bug sprays and products for animal nutrition.
SCIL operates in 2 main segments, Agro Chemicals and Others (concerning environmental health and animal nutrition). The company also makes various technical-grade pesticides in its factories, with its own research and development facility.
4) UPL Limited
Formerly known as the United Phosphorus Limited, UPL Limited is an Indian company that manufactures and develops crop protection products. The company manufactures and trades agrochemicals, field crops and vegetable seeds. It also deals with industrial chemicals, speciality chemicals and chemical intermediates.
The company’s crop protection segment focuses on manufacturing and selling herbicides, fungicides, insecticides, etc. The seeds business segment deals with producing and selling seeds. It also provides crop care services like water conservation, innovative nutrition, NPP Biosolutions, etc. Besides, UPL offers a range of public health solutions like termite control, crawling pest control, mosquito control, etc.
Factors to Consider Before Investing in Agriculture Stocks in India
The following are the factors that you must consider before buying the best agriculture shares in India:
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Supply Chain
Agriculture firms depend on complex supply chains for production, distribution and transportation. The ability to withstand disruptions from logistical challenges, transportation issues or labour shortages is crucial, as these can affect company operations and financial performance.
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Integration of Technology
You should recognise that successful agricultural companies leverage technology to enhance productivity and efficiency. Those in India embracing innovative agricultural practices, precision farming, and digital solutions are likely to provide long-term growth in future.
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Regulatory Environment
Government policies, subsidies, and regulations pertaining to agriculture can significantly impact a company’s profitability. You should stay informed about policies affecting areas such as crop pricing, fertilisers, and subsidies.
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Be Aware of Market Trends
You should remain updated with the global and domestic trends in agriculture. Stay updated with the changes in policy, market dynamics and international trade that can impact your agriculture stocks.
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Portfolio Diversification
The agricultural stocks often maintain diversified portfolios across various segments of the agriculture value chain. This diversification helps mitigate risks associated with specific agriculture sectors.
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Financial Health
It is essential to analyse the financial health of agriculture companies. Factors such as revenue growth, profitability, debt levels, and cash flow offer insights into the stability and growth potential of agricultural sector stocks.
Should You Invest in Agriculture Stocks?
Before you decide to invest in agriculture sector stocks in India, it is crucial to understand the potential risks involved. Changes in government regulations regarding the use of essential materials and chemicals could directly impact the product offerings of these businesses. This may result in an immediate halt to sales revenue, requiring substantial investments in research and development for new products.
Additionally, ineffective marketing strategies could lead to a loss of market share to competitors, further impacting the company's performance.
Moreover, India's unpredictable weather patterns or uneven rainfall can disrupt farming activities and crop yields, affecting the demand for fertilisers and thus influencing the company’s sales. You must also consider financial risks like cash flow shortages, low profits and market share loss.
Therefore, a comprehensive understanding of these factors is essential before considering investment in agriculture stocks.
The Bottom Line
Buying the agriculture stocks in India presents promising growth opportunities. However, it is vital to assess factors like financial health, technology integration, regulatory environment, etc., before making investment decisions.
Once you understand the associated risks and conduct thorough research, adding agricultural stocks to your portfolio can prove to be a valuable investment.
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*Stock Selection Criteria for Top Stocks Based on Analyst Rating Investors must carefully read through the following information on stock selection criteria while running through the stocks based on analyst ratings- These stocks have been shortlisted as per Analyst ratings provided by the I/B/E/S (The Institutional Broker’s Estimate System) database, further aggregated by Refinitiv. Ratings are determined by analysts' forecasts of company performance, taking into account metrics like earnings per share, sales, and net income. These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.). Before investing, investors must conduct independent research and not solely rely on the information provided here. This will allow investors to make appropriate investment decisions based on their financial goals, investment objectives and risk tolerance. |
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*Stock Selection Criteria for Top Stocks Based on Market Capitalisation These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.). |
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Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory. To read the RA disclaimer, please click here |