Best Agriculture Stocks in India

  • 03 May 2024
  • Read 20 mins read

Agriculture stocks refer to shares of companies involved in the agriculture sector, which includes companies engaged in farming, agricultural machinery, fertilisers, seeds, agrochemicals, and the processing and distribution of agricultural products. Agriculture, traditionally the backbone of India's economy, has provided millions with food and livelihoods. Today, it has evolved into an economically feasible option, surpassing its historical importance. In this article, we will discuss the top 10 agriculture stocks to buy, providing an overview of each.

What are agriculture stocks?

Agricultural stocks have a significant place in the world’s stock exchanges. Large agribusiness companies, manufacturers of agricultural machinery, fertiliser and seed producers, as well as companies seeking innovation in biotechnology and sustainable agriculture, can all be included in the classification of stocks based on the production, spread, and invention.

Table of Content

  1. What are agriculture stocks?
  2. List of Top 10 Agriculture Stocks In India
  3. Top Agriculture Stocks in India: An Overview
  4. Why Invest in Agriculture Stocks
  5. How to Invest in Agriculture Stocks?
  6. Factors to Consider Before Investing in Agriculture Stocks
  7. Features of the Top Agricultural Stocks in India
  8. Who Should Invest in the Best Agriculture Stocks?
  9. How to Select the Best Agriculture Stocks in India
  10. What are the Advantages and Disadvantages of investing in Agriculture stocks?

 

List of Top 10 Agriculture Stocks In India

Investors closely monitor the agriculture share price, which has seen unexpected fluctuations, possibly linked to recent changes in global trade policies and weather patterns affecting crop production. The following is an agriculture stocks list of India's Top 10 agricultural stocks to buy in 2024.

Stock NameMarket Cap Share Price
UPL Ltd372.04 billion495
PI Industries Ltd561.083,699
Coromandel International Ltd322.34 billion1,094
Bayer CropScience Ltd249.435,550
Sumitomo Chemical India Ltd202.41 billion405
Chambal Fertilisers and Chemicals Ltd153.07 billion375
BASF India Ltd155.35 billion3,589
Gujarat Narmada Valley Fertilisers Chemicals Ltd 102.32 billion696
Fertilisers And Chemicals Travancore Ltd437.87 billion676
Bombay Burmah Trading Corporation Ltd108.74 billion 1,558

 

Disclaimer: This agriculture share list contains data updated as of April 23rd, 2024. However, it's important to conduct thorough research before making any investment decisions in these stocks.

Top Agriculture Stocks in India: An Overview

New developments and trends are driving interest in agricultural sector stocks. Now let's take a closer look at the top agriculture stocks mentioned above.

  • UPL Ltd

    With an exceptional 16% annual growth rate, UPL's operating revenue in the last 12 months was outstanding ₹49,381.00 Cr. There is a great 13% return on equity (ROE) and a commendable 9% pre-tax profit. Still, at 75%, the company's debt-to-equity ratio is on the higher end. On our agriculture shares list, it may be regarded as one of the best agricultural stocks in the country.

  • PL Industries Ltd

    PI Industries from the previous year made ₹ with 7,206.10 Cr. in operating revenue. The exceptional numbers include a pre-tax margin of 22%, a very high ROE of 17%, and a remarkable annual revenue development of 23%. This stock is a very interesting choice amongst the top 10 agriculture companies in India for 2024 due to its highly outstanding and debt-free balance sheet that ensures profits that are stable and regular, including during financial downturns.

  • Coromandel International Ltd

    Coromandel International is one of the best growth agriculture stocks. Having made an outstanding Rs 26,466.93 Cr. within the past 12 months. Its annual revenue has increased by an impressive 55% with a pre-tax margin of 9% and returned on equity of 25%, placing it in the top 100 Indian agriculture stocks.

  • Bayer CropScience Ltd.

    Bayer CropScience delivered a stunning Rs. 5,377.20 Cr during the preceding 12 months. Given its remarkable financial performance, the 9% annual revenue growth has given it a strong 19% pre-tax profit and an outstanding 27% ROE. Therefore, throughout economic cycles, Bayer CropScience tends to generate somewhat predictable earnings growth. The stock has a debt-free position on the balance sheet. Therefore, by 2024, it will become one of the best Indian agriculture companies on the stock exchange.

  • Sumitomo Chemicals India Ltd

    Recorded strong operational revenue of Rs. 3,032.95 Cr. over the previous year, Sumitomo Chemical India’s remarkable 15% yearly growth. With a strong ROE of 21% and a pre-tax margin of 19%, the company has no debt but a strong and supportive balance sheet with steady earnings growth predicted over the next several economic cycles. Therefore,  Sumitomo Chemical India is on top of the agricultural companies list for stock market investment.

  • Chambal Fertilisers Ltd

    Chambal Fertilisers Ltd., which is part of Chambal Fert. & Chems., delivered operational revenues of Rs. 22,869.68 Cr. last year, a truly superior annual growth rate of 73%. Its pre-tax margin is around 5% and the return on equity stands at 14%. Chambal has a debt-to-equity ratio of 25%, but this remains high. Therefore, the financial sheet of the company is very strong and healthy. This is one of the best stocks in the Indian food industry in the list.

  • BASF India Pvt

    In the last 12 months, BASF India has produced an operating income of Rs.13,256.24 Cr. There is only a 4% yearly rise in revenue but can be improved further since the pre-tax margin is now 4%. The ROE of 14% is ok, which is acceptable. The company has a strong balance sheet and is debt-free. This means it should have stable earnings growth regardless of economic cycles.

  • Gujarat Narmada Valley Chemicals for Fertilisers Ltd.

    In the last 12 months, Gujarat Narmada Valley Fertilisers and Chemicals (Guj. Narmada Valley.Fcm.) produced an impressive.₹8,676.00 Cr. in operating revenue. As seen by the company's excellent 20% annual revenue growth rate, 19% pre-tax profit, and 16% ROE, it is a financially strong operation. Notably, the company can continue steady earnings growth across many business cycles because it is debt-free and has a robust balance sheet.

  • Fertilisers and Chemicals Travancore

    Chems & Fert. With a strong operational revenue of ₹5,866.56 Cr. During the last 12 months, Travancore demonstrated an outstanding 39% annual growth. The company’s extraordinary ROE of 48% and solid pre-tax margin of 10% allow it to run debt-free and retain a strong balance sheet that sustains steady earnings growth during business cycles.

  • Bombay Burmah Trading Corporation Ltd

    With an annual growth rate of 15%, Bombay Burmah Trading's operating income for the previous year was a staggering ₹17,000.79 Cr. Although the pre-tax margin is a respectable 7%, the ROE is a huge -41%, indicating that there is room for improvement. Notably, the company's debt-to-equity ratio of 106% is alarmingly high.

Why Invest in Agriculture Stocks

Recent advancements in biotechnology are expected to positively impact stocks in agriculture sector. Buying agricultural stocks in India provides an excellent opportunity for both financial and sectoral growth. Let's understand why: 
 

  • Economic Pillar:

    India's workforce is employed in agriculture, which accounts for over 58% of the country's GDP (17.8%). India's economy and socio-economic structure are based primarily on the agriculture sector.

  • Global Significance:

    India is now a significant user of agrochemical products worldwide as a result of its efforts to diversify and boost agricultural output.

  • Technological developments:

    "Kisan Drones," digitisation, and sophisticated spraying methods are examples of innovations that increase farmer productivity.

  • Positive Impact:

    Better seeds, crop protection, tractors, irrigation, and overall agricultural output are all made possible by increased farmer revenue.

  • Investment Opportunity:

    Shares in agriculture provide financial gains while fostering long-term expansion in a sector vital to India's prosperity.

How to Invest in Agriculture Stocks?

For those interested in low-cost investments, exploring agriculture penny stocks could be a promising start. Follow below-mentioned steps to invest in Indian agriculture stocks profitably.

 

  • Step 1: Learn about India's agricultural shares and their dynamics.  
  • Step 2: Identify your level of risk tolerance and make a budget. 
  • Step 3: Select your investing strategy: you may select direct organic food stocks or agriculture focused funds with an emphasis on agriculture. 
  • Step 4: Based on strong financials, choose particular agricultural stocks or funds from the NSE and diversify. 
  • Step 5: Work with a stockbroker to open a trading and Demat account. 
  • Step 6: Keep an eye on your investments and read industry news often. 
  • Step 7: Because of sector swings, adopt a long-term perspective. 
  • Step 8: To make well-informed decisions, think about consulting a specialist.

Factors to Consider Before Investing in Agriculture Stocks

Things to Consider Before buying Agricultural Stocks. Investors should consider a few factors before buying shares in the agriculture sector. All of these factors may influence the choice of India's top agricultural stocks.

  • Market Trends and Demand

    The selection of agri stocks in India is heavily influenced by the performance of the Indian agricultural sector as well as the general demand for agricultural products. The financial performance of Indian agriculture companies involved in farming, agribusiness, and associated operations can be enhanced by favourable market trends.

  • Company Finances

    It's important to assess the financial standing of Indian companies in the agriculture sector. A company's stability and prospects for growth in the agriculture industry are indicated by various factors, including cash flow, debt levels, revenue growth, profitability, and debt levels.

  • Regulatory Environment

    The profitability of companies can be greatly impacted by government policies, subsidies, and regulations related to agriculture. Policies affecting things like crop prices, fertilisers, and subsidies should be known to investors.

  • Research and Development

    Leading Indian Agribusinesses have a greater ability to adjust to shifting market conditions when they allocate resources towards R&D, which is the process of creating new crop varieties, agrochemicals, and technology.

  • Economic Indicators

    Keeping an eye on broader economic metrics like GDP growth, interest rates, and inflation might affect the overall health of the agriculture stock market.

Features of the Top Agricultural Stocks in India

The list of agriculture stocks in NSE has expanded, reflecting the sector's growing importance in the national economy.When analysing Indian agricultural stocks, a few essential features set the best performers apart.

  • Market Presence and Reputation

    Top agricultural penny stocks in India have built an excellent track record in the sector and a strong market presence. Look for companies that have a history of reliability and consistent performance.

  • Diverse Portfolio

    The top agricultural stocks usually have varied portfolios covering a range of agricultural value chain elements. This diversification helps to mitigate risks linked to certain agricultural industries.

  • Technological Integration

    Productivity and efficiency improve by the use of technology in productive agriculture, or more broadly, food reserves. Agricultural companies in India embracing innovative agricultural practices, precision farming, and digital solutions are well-suited for sustained growth.

  • Stability and Financial Health

    It's important to evaluate agricultural stocks' financial stability. Strong financial infrastructure, stability, and successful risk management are characteristics of top performers.

  • National and International Trends Awareness

    The Agriculture companies need to be aware of both national and international trends. Adaptability and resilience are made possible by knowledge of market dynamics, policy changes, and the effects of international commerce.

  • Sustainability Practices

    Eco-friendly and socially responsible techniques are given importance by leading agricultural stocks as their focus on sustainability grows. Companies that use sustainable farming practices are well-positioned to respond to changing consumer needs, which also involve buying.

Who Should Invest in the Best Agriculture Stocks?

It is important to have a comprehensive understanding of potential risks while investing in Indian agriculture sector stocks. Government rules regarding chemicals and key materials can change, which can have a direct impact on product offers and require large investments in R&D for new items. The performance of the company may be impacted by inefficient marketing tactics that cause competitors to gain market share.

Unpredictable weather patterns and irregular rainfall can cause farming activities to be disrupted, which in turn affects sales of fertilisers and demand for them. It is also necessary to take into account financial risks including low profitability, market share loss, and cash flow issues. Thus, before considering investing in agriculture equities, a thorough grasp of these aspects is essential.

How to Select the Best Agriculture Stocks in India

It is important to carry out extensive study and analysis to choose the top agricultural stocks in India. Analysing the company's financial performance, including sales growth, profitability, and debt levels, is an excellent way to start. Evaluating the company's market position, competitive advantages, and growth possibilities within the agriculture sector may also prove to be beneficial. Look for companies that have a strong presence in key agricultural markets and a diverse range of products. 

Furthermore, consider elements that could affect the company's performance, such as the regulatory landscape, technological developments, and worldwide commodity pricing. By carefully evaluating all of these factors, investors can find attractive agricultural companies with the potential for long-term growth and profitability.

What are the Advantages and Disadvantages of investing in Agriculture stocks?

Investing can be a powerful way to build wealth, but it comes with its own set of risks and challenges that must be carefully considered. Understanding these risks is crucial for anyone looking to enter the investment market. Here, we explore the potential pitfalls and complexities involved with the help of following table:

Sr. No.Advantages of investing in Agriculture stocks Disadvantages of investing in Agriculture stocks

    1.

The production of food depends on agriculture, which makes it an industry that will always be needed.Prices can be highly susceptible to weather conditions, diseases, and fluctuating commodity prices.

    2.

Adding agriculture stocks can diversify an investment portfolio away from tech-heavy or industrial sectors.High costs for land, equipment, and technology can lead to significant capital expenditures.

3.

Increasing global population and demand for food can drive growth in the agriculture sector.Agriculture is heavily regulated, and changes in policies can impact profitability.

4. 

Advances in agritech and sustainable farming practices offer new investment opportunities.Farming operations face logistical challenges that can affect production and profits.

5.

Many governments offer subsidies and support to the agriculture sector, which can provide financial stability and growth incentives.The prices of agricultural goods can be highly volatile due to external factors like weather conditions and economic downturns

Conclusion 
Investing in agriculture stocks offers a unique blend of opportunities and challenges that reflects the sector's fundamental role in the global economy. As the demand for food continues to rise with the growing global population, the potential for growth in this sector cannot be underestimated. Moreover, agricultural investments can serve as a hedge against inflation and add valuable diversification to investment portfolios.

In this article we explored crucial aspects for investors in Indian agriculture stocks, defining the sector's significance and listing the top companies with market caps. We also discussed essential factors, and strategies for selecting the best agriculture stocks in india. Now you can easily manage your portfolio of agriculture stocks using an online trading app. Such  apps offer real time data and trading capabilities at your fingertips.

FAQs on Agriculture Stocks

Yes, they can be subject to market volatility due to factors like weather, global supply, and commodity prices.

Many agriculture companies pay dividends, offering a potential income stream for investors.

Yes, commodities and real assets like agriculture typically perform well during inflationary periods.

Yes, several ETFs specifically focus on agriculture and related industries.

Since many agricultural products are traded globally, currency changes can impact export competitiveness and profitability.

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