Best Fertilizers Stocks in India
(The stocks mentioned in the blog are as per Analyst Ratings and Market Capitalization)
Fertilisers are crucial for agriculture, providing essential nutrients for crop growth and development, thus significantly impacting overall yield.
The fertiliser industry in India plays a vital role in boosting agricultural output, addressing food security concerns and generating rural employment. Being a fundamental sector in the country, fertiliser production in India has consistently shown positive growth.
Fertiliser Industry in India - A Brief Overview
The Indian fertiliser sector plays a crucial role in agriculture by improving soil fertility and promoting plant growth. It offers various types of fertilisers like nitrogenous, potassium, phosphatic and organic ones, tailored to different soil and crop needs. India has one of the world's biggest fertiliser industries, driven by high agricultural demand. The sector is consistently growing due to increased farming, government aid and technological advancements.
Both domestic production and significant imports fulfil India's fertiliser requirements. Government support through policies and schemes like Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) encourages fertiliser usage and agricultural productivity. Innovations such as precision farming and bio-fertilizers improve efficiency and market expansion.
Awareness of sustainable farming practices is rising, leading to a demand surge for organic and eco-friendly fertilisers. Collaborations and agreements between companies further fuel market growth and widen the availability of specialised fertilisers. In 2023, the India Fertilizer Market reached a value of USD 41.2 billion, projected to rise to USD 70.2 billion by 2032, reflecting a steady growth rate of 6.1% annually till then.
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Top Fertiliser Stocks in India in 2024 as per Market Capitalisation
The following table provides the top fertiliser stocks list in India in 2024, sorted as per market capitalisation:
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Fertiliser Stocks in India (as per market capitalisation) |
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*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog. |
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Overview of Best Fertiliser Stocks in India as per Market Capitalisation
Here is a comprehensive overview of the best fertiliser stocks in India in 2024 as per market capitalisation:
1) Fert & Chem Travan
Incorporated in 1943, Fertilisers And Chemicals Travancore Limited (FACT) was India's first large-scale fertiliser plant in Udyogamandal. The company provides products in 3 segments - fertilisers, caprolactam, and by-products.
In the fertilisers segment, Gujarat Narmada Valley Fertilisers & Chemicals Limited (GNFC) provides straight fertilisers, complex fertilisers, bio-fertilizers, imported fertilisers, organic fertilisers and bagged gypsum. Additionally, the company utilises its caprolactam in producing nylon filament yarns, nylon tyre cords and engineering plastics, primarily serving the textile and automobile sectors.
FACT’s by-products segment includes various products like anhydrous ammonia, cyclohexanone, coloured ammonium sulphate, soda ash, cyclohexane, nitric acid, gypsum and sulphuric acid.
The company’s Cochin division has a production capacity of 4,85,000 tons per year of complex fertiliser, about 3,30,000 tons per year of sulfuric acid, and over 1,15,200 tons per year of phosphoric acid. Its Udyogamandal Plants have an installed capacity of around 76,050 tonnes of nitrogen and 29,700 tonnes of phosphorus pentoxide.
2) Coromandel International
Founded in 1906, Coromandel International Limited manufactures and trades farm inputs such as fertilisers, crop protection solutions, speciality nutrients and organic compost. The company established its first fertiliser plant in Ranipet, Tamil Nadu. It operates through 2 main segments - crop nutrition and crop protection. Under the crop nutrition segment, it offers fertilisers, organic nutrients and speciality nutrients.Â
Coromandel provides fertilisers containing phosphate, nitrogen, potassium and calcium in different grades, which are sold under various brands like Grosmart, Gromor 15-15-15-09, GroShakti Plus, Godavari Ultra DAP, Paramfos, Gromor MOP, Godavari DAP and Gromor Urea. Meanwhile, the crop protection section includes insecticides, herbicides, fungicides, and bio-products.
Notably, Coromandel International Limited holds the distinction of being the world's largest producer of neem-based bio-pesticides, and a prominent marketer of organic fertilisers. It boasts the largest agri-retail network in the country and has more than 750 retail stores in India.
3) Chambal Fertilisers
Accounting for around 13% of the total urea produced in India, Chambal Fertilisers and Chemicals Limited operates 3 hi-tech nitrogenous fertiliser plants in Gadepan, Rajasthan.Â
The company is involved in both urea production and the marketing of various fertilisers and agricultural inputs. These include ammonium phosphate sulphate (APS), muriate of potash (MOP), di-ammonium phosphate (DAP), and different grades of nitrogen, phosphorous, and potassium (NPK) fertilisers, sulphur, micronutrients and agrochemicals. Additionally, it offers crop protection products such as fungicides, insecticides and herbicides.
Chambal Fertilisers caters to farmers' requirements in approximately 10 states across northern, eastern, central and western India. It holds the position of being the primary fertiliser supplier in Rajasthan, Madhya Pradesh, Punjab and Haryana. The company's subsidiaries include Chambal Infrastructure Ventures Limited, CFCL Ventures Limited, ISG Novasoft Technologies Limited and ISGN Corporation.
4) GNFC
In 1976, Gujarat Narmada Valley Fertilisers & Chemicals Limited (GNFC) was established as a manufacturer and seller of fertilisers, industrial chemical products and providers of information technology (IT) services. The company is based in India and operates across multiple segments, including fertilisers, chemicals, FMCG products and others. Under the fertiliser segment, GNFC manufactures ammonium nitro phosphate and urea, which are marketed under the brand name Bharat.Â
The chemicals segment is involved in producing various chemicals such as formic acid, ethyl acetate, methanol, concentrated nitric acid, technical grade urea, toluene di-isocyanate, aniline, weak nitric acid, etc.
In addition, the company's other segment includes activities related to its information technology division and neem products. GNFC's IT division offers a range of value-added services including software application development, data centre, cloud computing, e-procurement, blockchain technology, e-governance solutions, CCTV surveillance systems and more.
5) GSFC
Incorporated in 1962, Gujarat State Fertilisers & Chemicals Limited (GSFC) commenced fertiliser production in 1967. It is an India-based company primarily involved in manufacturing fertilisers and chemicals. The company operates under 2 main segments- fertiliser and industrial products. Its fertiliser segment comprises ammonium phosphate sulphate, urea, di-ammonium phosphate, ammonium sulphate, NPK(10:26:26), Boronated NPK (12:32:16), gypsum, etc.Â
Under the industrial products segment, GSFC produces nylon chips, nylon-6, melamine, methanol, caprolactam and other industrial products. Moreover, the company's product categories span other products like micronutrients, organic products, water-soluble fertilisers, plant tissue culture, sulphur-based products, soil conditioners, plant growth promoters and seeds.
This company also provides Agro services like farm youth training programmes, crop demonstrations, Krishi Jivan, soil testing laboratory services and more.
Factors to Consider Before Investing in Fertiliser Stocks in India
The following are some crucial factors you must consider before buying fertiliser stocks in India:
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Agricultural Output
When agricultural production in multiple regions is strong, there is more demand for fertilisers, which boosts stock prices. However, if crop production is weak due to bad weather or poor soil, companies in this sector may see their stock prices drop.
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Commodity Prices
When prices of fertilisers like ammonium nitrate and urea are high, companies make more profit, and their stock prices go up. However, if prices are low or keep changing a lot, these companies might lose money, causing the price of fertiliser sector stocks to fall.
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Geopolitical Risks
Consider geopolitical risks that may affect fertilizer supply chains, such as trade disputes, international sanctions, or political instability in key fertilizer-producing regions.
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Demand for Fertilizers
Analyze the demand for fertilizers in India, which is heavily influenced by factors such as population growth, food consumption patterns, government policies, and agricultural practices. Understanding seasonal variations in demand is also important.
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Government Policies and Subsidies
Government policies play a significant role in the fertilizer industry, including subsidies on fertilizers, pricing regulations, and import/export policies. Changes in government policies can have a direct impact on the profitability of fertilizer companies.
Should You Invest in Fertiliser Stocks?
Fertiliser stocks present an opportunity for potential long-term capital growth within the agriculture sector. However, the fertiliser industry has its ups and downs due to fluctuations in commodity prices, weather patterns and government policies related to agriculture. Therefore, before investing, it is crucial to conduct in-depth research on the fertiliser stocks you are interested in buying.
When selecting the best fertiliser stocks for your investment portfolio, you must take into account factors such as your risk tolerance, the stock's historical performance, company financials, market capitalization and future business prospects. By carefully considering these factors, you can make informed decisions about investing in fertiliser stocks.
The Bottom LineÂ
Investing in fertiliser stocks in India requires careful consideration of various factors, as mentioned above. While fertiliser stocks offer potential long-term growth opportunities within the agriculture sector, they are subject to fluctuations influenced by external factors.Â
Therefore, thorough research and evaluation of factors are essential for making informed investment decisions.
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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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