In India, agriculture is the primary source of livelihood for about 58% of its population. In an interim budget in January 2019, the government of India made clear that farmers are at the top of its agenda.

The Bharatiya Janata Party (BJP) aims to invest 25 trillion rupees in rural development of India and offer farmers Rs. 6,000 per year in income support.

Now that the election results are out experts believe they are likely to propel agriculture sector stocks in the next few years to come.

Rural-focused companies including those providing seeds, pesticides, irrigation products, consumer staples, and tractor manufacturers stand to gain with the general election results.

In this blog, I have listed 10 agricultural sector to bet on in 2019.

[stocks-data title= “Agricultural Sector Stocks That Can Do Wonders to Your Portfolio” stockcodes=”pi-industries-ltd:rashtriya-chemicals-fertilizers-ltd:punjab-chemicals-crop-protection-ltd:escorts-ltd:upl-ltd:dcm-shriram-ltd:coromandel-international-ltd:jain-irrigation-systems-ltd:godrej-agrovet-ltd”]

1. PI Industries Ltd.

Incorporated in the year 1946, PI Industries Ltd. operates with a unique business model across the Agchem value chain which includes everything from R&D to distribution, providing innovative solutions.

With 72 years of experience, PI Industries is now one of the leading and fastest growing agri-sciences companies in India and amongst the top 10 in custom synthesis, partnering with innovators for developing innovative products and crop protection solutions globally, with set-ups in India, China, Japan, and Germany.

Today, PI Industries Ltd. stands strong with a workforce of more than 2000 employees and connected with more than 84,000 retail points pan India.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 1142.30
1137.35
1 Year Profit / Loss (%) 34.69 34.72
3 Year Profit / Loss (%) 89.86 89.92
5 Year Profit / Loss (%) 280.19 280.23
Beta (1 year) 0.48 0.54
Avg. Daily Volatility (% on year basis) 1.51 1.57

Key Market Indicators

Market Cap (₹ Cr) 14,226
Book Value (₹) 138.95
P/E 38.66
Industry P/E 33.74
P/B 7.42
Dividend Yield (%) 0.39
Return on Equity (%)
17.94

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 804.80 28.75
EBITDA (₹ Cr) 194.10 26.24
Net Income (₹ Cr) 124.40 18.00
EPS (₹) 9.02 18.37

Note: All the above values as on 24/05/2019

2. Rashtriya Chemicals & Fertilizers Ltd.

Rashtriya Chemicals & Fertilizers Ltd. (RCFL) is an Indian Public Sector Undertaking (PSU) incorporated in the year 1978

It operates under the Ministry of Chemicals and Fertilizers of the Government of India and is headquartered in Mumbai.

RCFL is the 4th largest producer of fertilizers in India.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 60.45
60.25
1 Year Profit / Loss (%) – 11.82 – 11.78
3 Year Profit / Loss (%) 36.00 36.05
5 Year Profit / Loss (%) 11.02 11.13
Beta (1 year) 1.47 1.48
Avg. Daily Volatility (% on year basis) 2.26 2.29

Key Market Indicators

Market Cap (₹ Cr) 3,084
Book Value (₹) 53.10
P/E 39.13
Industry P/E 16.86
P/B 1.05
Dividend Yield (%) 1.07
Return on Equity (%) 4.42

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 2,266.98 15.02
EBITDA (₹ Cr) 156.76 286.20
Net Income (₹ Cr) 48.47 64.08
EPS (₹) 0.88 62.96

Note: All the above values as on 24/05/2019

3. Punjab Chemicals & Crop Protection Ltd.

Incorporated in the year 1975, Punjab Chemicals & Crop Protection Ltd. hold proficiency in manufacturing and wholesaling an extensive range of chemicals.

Its divisions include – agrotechnical, agar formulations, pharmaceuticals, intermediates, chemicals, and international trading.

Currently, Punjab Chemicals & Crop Protection Ltd. has various state-of-the-art manufacturing sites which are located across India and have international standards with support from its R&D strengths and unparalleled pilot plant facilities.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 673.15
670.60
1 Year Profit / Loss (%) 42.32 42.43
3 Year Profit / Loss (%) 311.34 311.42
5 Year Profit / Loss (%) 721.92 721.98
Beta (1 year) 1.11 0.97
Avg. Daily Volatility (% on year basis) 2.15 2.13

Key Market Indicators

Market Cap (₹ Cr) 851
Book Value (₹) 60.49
P/E 49.53
Industry P/E 33.74
P/B 11.47
Dividend Yield (%) NA
Return on Equity (%)
18.48

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 183.51 26.07
EBITDA (₹ Cr) 18.25 – 1.46
Net Income (₹ Cr) 7.24 3.43
EPS (₹) 5.90 3.33

Note: All the above values as on 24/05/2019

4. Escorts Ltd.

Incorporated in the year 1944, Escorts Ltd. is an Indian engineering company that operates in the areas of agri-machinery, construction, material handling equipment, and railway equipment.

The company is headquartered in Faridabad, Haryana and has marketing operations in more than 40 countries around the globe.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 633.50 634.90
1 Year Profit / Loss (%) – 28.51 – 28.43
3 Year Profit / Loss (%) 270.25 270.27
5 Year Profit / Loss (%) 391.66 391.69
Beta (1 year) 1.88 1.92
Avg. Daily Volatility (% on year basis) 2.37 2.38

Key Market Indicators

Market Cap (₹ Cr) 7,952
Book Value (₹) 180.71
P/E 22.92
Industry P/E 9.33
P/B 3.59
Dividend Yield (%) 0.31
Return on Equity (%)
17.91

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 1,631.66 13.62
EBITDA (₹ Cr) 207.11 5.50
Net Income (₹ Cr) 121.35 7.83
EPS (₹) 10.15 7.75

Note: All the above values as on 24/05/2019

5. UPL Ltd.

UPL Ltd., famously known by the name United Phosphorus Limited, is an Indian multinational company that manufactures and markets agrochemicals, industrial chemicals, chemical intermediates, and specialty chemicals. It also offers crop protection solutions to its customer base.

Established on 29th May 1969, UPL Ltd. is headquartered in Mumbai, Maharashtra and it engages in both agro and non-agro activities.

But its primary source of revenue is agro-business which includes the manufacturing and marketing of conventional agrochemical products, seeds, and other agricultural related products.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 633.50 1020.85
1 Year Profit / Loss (%) 46.78 46.82
3 Year Profit / Loss (%) 79.46 79.48
5 Year Profit / Loss (%) 231.92 231.97
Beta (1 year) 1.22 1.21
Avg. Daily Volatility (% on year basis) 2.04 2.08

Key Market Indicators

Market Cap (₹ Cr) 48,566
Book Value (₹) 188.04
P/E 24.05
Industry P/E 33.74
P/B 5.07
Dividend Yield (%) 0.84
Return on Equity (%)
9.88

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 8,525.00 49.80
EBITDA (₹ Cr) 1,339.00 – 13.00
Net Income (₹ Cr) 206.00 – 72.01
EPS (₹) 4.04 – 72.02

Note: All the above values as on 24/05/2019

6. DCM Shriram Ltd.

Incorporated in the year 1989, DCM Shriram Ltd. is a leading business conglomerate in India providing farm solutions, bio seeds, sugar, chloro-vinyl, and fertilizers.

The company has delivered consistent profit growth of 22% over the past 5 years. The chlorine alkali business is becoming stronger with economies of scale and substantial improvement in power efficiencies.

It maintains a flawless balance sheet with a proven track record and pays a dividend on a regular basis. It expects to generate more revenue from the current fiscal year.

The business portfolio includes:

  • Agri-Rural Business: It includes the production of urea & SSP fertilizers, sugar, farm inputs marketing such as DAP, crop care chemicals, hybrid seeds
  • Chlor-Vinyl Business: It includes the production of caustic soda, chlorine, calcium carbide, PVC resins, PVC compounds, power, and cement.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 600.00 600.35
1 Year Profit / Loss (%) 128.93 128.97
3 Year Profit / Loss (%) 248.45 248.49
5 Year Profit / Loss (%) 352.70 352.74
Beta (1 year) 1.55 1.58
Avg. Daily Volatility (% on year basis) 3.38 3.37

Key Market Indicators

Market Cap (₹ Cr) 7,267
Book Value (₹) 226.08
P/E 11.30
Industry P/E 23.64
P/B 2.06
Dividend Yield (%) 1.76
Return on Equity (%) 25.68

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 1,880.17 21.21
EBITDA (₹ Cr) 438.90 360.06
Net Income (₹ Cr) 292.81 477.42
EPS (₹) 18.67 498.40

Note: All the above values as on 24/05/2019

7. Coromandel International Ltd.

Incorporated in the year 1961, Coromandel International Ltd. operates the business in the farm input segment, comprising of fertilizer, crop protection, specialty nutrients, and organic compost.

The company is also in the rural retail business in the state of Andhra Pradesh through its Mana Gromor Centres.

It is India’s 2nd largest phosphatic fertilizer player and manufactures a wide range of fertilizers and markets around 4.5 million tons making it a leader in its addressable markets.

The company has 16% market share in the segment.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 407.95 409.50
1 Year Profit / Loss (%) – 2.10 – 2.08
3 Year Profit / Loss (%) 81.96 81.99
5 Year Profit / Loss (%) 52.15 52.19
Beta (1 year) 0.72 0.68
Avg. Daily Volatility (% on year basis) 1.71 1.73

Key Market Indicators

Market Cap (₹ Cr) 12,284
Book Value (₹) 114.80
P/E 18.50
Industry P/E 16.86
P/B 3.66
Dividend Yield (%) 1.55
Return on Equity (%)
21.45

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 2,638.34 11.26
EBITDA (₹ Cr) 267.60 44.93
Net Income (₹ Cr) 110.38 50.12
EPS (₹) 3.77 51.41

Note: All the above values as on 24/05/2019

8. Jain Irrigation Systems Ltd.

Jain Irrigation Systems was incorporated in the year 1986. It is a multinational organization based in Jalgaon and operates in agriculture, horticulture and live sector.

It employs more than 11, 500 employees, and has 33 manufacturing plants spread across India.

The company has a diverse product portfolio which includes drip and sprinkler irrigation systems and its components, integrated irrigation automation systems, PVC and PE piping systems, plastic sheets, greenhouses, bio-fertilizers, solar power, solar water heating systems, solar water pumps, turnkey biogas plants, and photovoltaic systems.

It also processes dehydrated vegetables, concentrated and frozen fruit or pulp.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 56.10 56.15
1 Year Profit / Loss (%) – 42.70 – 42.71
3 Year Profit / Loss (%) – 12.48 -12.51
5 Year Profit / Loss (%) – 54.13 – 54.17
Beta (1 year) 1.91 1.91
Avg. Daily Volatility (% on year basis) 2.93 2.96

Key Market Indicators

Market Cap (₹ Cr) 2,497
Book Value (₹) 86.60
P/E 11.83
Industry P/E 19.86
P/B 0.58
Dividend Yield (%) 1.99
Return on Equity (%)
5.04

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 2,037.69 7.84
EBITDA (₹ Cr) 313.87 20.54
Net Income (₹ Cr) 82.42 23.05
EPS (₹) 1.60 23.08

Note: All the above values as on 24/05/2019

 

9. Godrej Agrovet Ltd.

Incorporated in the year 1991, Godrej Agrovet Ltd. is an Indian animal feed and agribusiness company.

The company holds a leading market position in poultry processing, animal feed, oil palm plantations, and agri-inputs.

It belongs to one of the highly diversified Indian Conglomerate the Godrej Group, founded by Mr. Ardeshir Godrej in 1897.

Performance of the Stock

Parameters BSE NSE
Current Price (₹) 501.30 503.95
1 Year Profit / Loss (%) – 21.27 – 21.31
3 Year Profit / Loss (%) NA NA
5 Year Profit / Loss (%) NA NA
Beta (1 year) 0.74 0.76
Avg. Daily Volatility (% on year basis) 1.46 1.46

Key Market Indicators

Market Cap (₹ Cr) 9,949
Book Value (₹) 85.87
P/E 43.41
Industry P/E 36.66
P/B 6.03
Dividend Yield (%) 0.87
Return on Equity (%)
19.95

Latest Quarterly Results

Q4 FY 2018-19 Results % Chg (Yearly)
Sales (₹ Cr) 1,340.86 12.23
EBITDA (₹ Cr) 85.52 0.73
Net Income (₹ Cr) 113.69 353.85
EPS (₹) 5.88 362.99

Note: All the above values as on 24/05/2019

The Bottom Line

The elected government is expected to launch several schemes to improve the farm productivity levels in India and provide monetary incentives like pension payment to farmers.

Recognizing the agriculture thrust of the Government, one can expect stocks from the agricultural sector mentioned above to perform well and see increased investor interest.

Happy Investing!

Disclaimer: The views expressed in this post are that of the author and not those of Groww. Groww in no-way advises or endorses the particular stocks mentioned in this article.

 

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