INSUBCONTINENT EXCLUSIVE:
Agriculture is the primary source of livelihood for about 58% of Indias population.It's that time of the year when people await the Union
The whole nation has great hopes for the forthcoming Union Budget 2022.The fate of several industries will be discussed in the upcoming
budget, which will be held on February 1, 2022.Today, we want to focus on one of the most important sectors of the Indian economy –
Fertiliser sector.The Indian government plans to allocate nearly $19 billion in its federal budget to compensate fertiliser companies who
sell their products at lower than market prices to farmers, reported Bloomberg.Following the withdrawal of three farm law bills last year,
five states including Uttar Pradesh, are set to hold elections earlier this year
This step is believed to placate farmers.The increase in fertiliser subsidies may aid fertiliser businesses in recouping volumes lost last
year due to higher input costs
The rise in subsidy would also assist farmers in coping with chemical firms' price hikes in order to reduce input costs.Agriculture is the
primary source of livelihood for about 58% of India's population
Based on this, India's fertiliser sector is incredibly essential
It produces some of the most crucial raw materials for agricultural production.The growing population of India is also one of the benefits
for the fertiliser business
It would result in increased demand in the future.With the help of Equitymaster's powerful stock screener, we've narrowed down the best
fertiliser firms in India for you to track.These are the stocks that came up when we ran the screener for top fertilizer companies in
Chambal Fertilisers - ChemicalsChambal Fertilisers and Chemicals is a manufacturer of urea and di-ammonium phosphate (DAP). It's the
largest manufacturer of urea in the private sector with an installed capacity of 1.5 m tonnes per annum (MTPA).The company's segments
include fertilisers and other agri inputs, own manufactured phosphoric acid, textile, shipping, and others.It was also engaged in software
But in 2021, it sold assets and transferred certain liabilities of the business to cease the software operations.The firm has a wide
distribution network of 3,700 dealers and 50,000 retailers across the country
It has presence in states such as J-K, Haryana, Uttarakhand, Punjab, Uttar Pradesh, Bihar, West Bengal, Madhya Pradesh, Rajasthan, and
It has access to 90% of total market size of fertilisers in India.For the September 2022 quarter, the net profit of Chambal Fertilisers rose
15.8% to Rs 5.1 billion against Rs 4.4 billion during the same quarter last year.The company will declare the December quarter results on
It will also provide information related to dividend pay outs.So far, the stock price has risen 111% to Rs 477 as on 20 January 2022 from Rs
214 in the same month last year.2
Coromandel InternationalCoromandel International is a part of the Murugappa Group
The group has presence across various industries such as auto components, abrasives, financial services, transmission systems, cycles,
sugars, farm inputs, fertilisers, plantations, etc.The company is one of India's leading agri solutions providers
It offers a diverse range of products and services across the farming value chain.It specialises in fertilizers, crop protein,
bio-pesticide, specialty nutrients, organic fertilizers, etc
The company distributes its products through a network of 20,000 dealers and 2,000+ market development team.It owns and operates 16
manufacturing facilities across India in Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, and other locations.Coromandel International
shares have underperformed in the last one year, declining by about 8%
Investor confidence has been affected by the irregular monsoon.However, the company's profitability prospects seem bright, thanks to
anticipated growth in the upcoming Rabi crop season.The company did well on the revenues front for the quarter ended 30 September 2022,
registering a growth of 34% over the previous year.3
Rama PhosphatesRama Phosphates (RPL) is one of the leading phosphatic fertilizer manufacturers, i.e
single super phosphate (SSP) fertilizer manufacturing, in India.The company also produces oleum, nitrogen, phosphorous, and potassium (NPK),
de-oiled cake, and soya oil.It's trademark brands, ‘Suryaphool' and ‘Girnar' are well recognised in the farming community.On the
financial front, Rama Phosphates net profit rose 101.1% to Rs 227.2 million in the quarter ended September 2021 against Rs 113
million during the previous quarter in 2020
The company's strong performance was on the back of higher operational revenue.Over the last 5 years, the company has delivered good profit
growth of 39.3% compound annual growth rate (CAGR).That apart, ace investor Dolly Khanna has picked up additional stake in this multibagger
fertilizer stock, as per the December 2021 shareholding data.Dolly Khanna has bought around 0.4% stake in Rama Phosphate, taking the total
holding to nearly 2.3%, or 4 lakh equity shares in the company.The fertiliser stock in the last one-year has delivered multibagger returns
of 320%, while in a month's time, it has gained 31%.4
Dharamsi Morarji ChemicalDharamsi Morarji Chemical company is engaged in manufacturing of bulk chemicals and specialty chemicals used in
industries such as pharmaceuticals, detergents, dyes, etc.This smallcap company was among the first producer of sulphuric acid and phosphate
fertilisers in India.It's a multi-product, multi-locational company and has emerged as the single largest manufacturer of SSP in India as
well as a major producer of heavy chemicals.It has two manufacturing facilities located in Roha and Dahej.The company is backed by a number
of key clients including Alkyl Amines, IPCA, Apcotex, Aurobindo, Dow, Deepak Nitrite, Pidilite etc.The company recorded a strong growth in
revenues in September 2022 quarter as the revenues increased 61% to Rs 725.3 m against Rs 497.7 m in the same period last year
The growth is due to higher realisations and moderate increase in volumes.However, earnings before interest, taxes, depreciation, and
amortization (EBITDA) margins and profitability suffered on account of sharp increase in the prices of raw materials and freight costs.The
company recorded strong performance in the specialty chemicals segment despite the challenging operating environment
It remains confident about passing on the increasing input costs to customers in this segment.The outlook for the specialty chemicals
The company is witnessing strong demand from domestic as well as export customers.In the past year, the company has managed to double its
The share price has surged over 100% during the period.5
Deepak FertilisersDeepak Fertilisers and Petrochemicals (DFPCL) is an Indian manufacturer of industrial and agricultural chemicals, crop
nutrients, and fertilizers
It also owns real estate.The company has marketed fertilizers under the brand name of ‘Mahadhan' since 1990.Deepak Fertilisers is one of
the largest manufacturers of chemicals in India
It manufactures technical ammonium nitrate (mining chemicals), industrial chemicals, and crop nutrition
These products have uses in explosives, mining, infrastructure, and healthcare.Recently, Deepak Fertilisers' Smartchem Technologies, a
fully-owned subsidiary, said that Odisha's Chief Minister Naveen Patnaik had laid the foundation stone for a Rs 22 billion technical
ammonium nitrate complex.The complex, located at the Gopalpur Industrial Park, will have an annual capacity of 377-kilo tonne and is
scheduled for commissioning by August 2024.Once completed, the project will help Odisha become a key supply source for technical ammonium
nitrate, serving the entire Eastern region, from where a majority of future mining growth is expected to come.This bodes well for the
company.Deepak Fertilizers reported a 16% YoY jump in consolidated net profit to Rs 933.3 million in the second quarter ended September,
primarily driven by higher income.The net income in the second quarter increased to Rs 18 billion from Rs 14.2 billion in the year-ago
period.Deepak Fertilisers share price has delivered around 45.5% return to its shareholders in the last one month, while in the last six
months the chemical stock has given around 29% return.While, in the past one year, it has given around 230% return to its investors.Snapshot
of top fertilizer stocks in India from Equitymaster's stock screenerHere's a quick view at the above mentioned companies based on some
crucial financials.Please note these parameters can be changed according to your selection criteria.This will help you in identifying and
eliminating stocks that are not meeting your requirements and give emphasis on those stocks that are well inside the metrics.To
concludeGiven the importance of agriculture, the fertiliser business is one that the Indian economy cannot afford to ignore.The share of
agriculture in gross domestic products (GDP) increased to 19.9% in 2020-21 from 17.8% in 2019-20
The last time the contribution this high was in 2003-04.Agribusiness is a life-sustaining industry and it offers excellent investment
opportunities.However, not all agricultural stocks are the same
Each business has its own set of concerns
When deciding which agricultural stocks are suitable, examine how these opportunities and risks fit with your investment preferences.Look
for companies which are innovating
Think agritech, which has huge untapped potential
Although at a nascent stage, agritech is bound to change the way agriculture business is done.To conclude, when it comes to investing, the
stock you choose must be credible
Investors should put their money into a firm that has a proven track record of success.If there isn't enough confidence in the stock, it can
make the initial investment weak and deplete it before it has a chance to grow.Happy Investing!Disclaimer: This article is for information
It is not a stock recommendation and should not be treated as such. (This article is syndicated from Equitymaster.com)(This story has not
been edited by TheIndianSubcontinent staff and is auto-generated from a syndicated feed.)
