Best Fertilizer Stocks in India for 2024

Best Fertilizer Stocks In India

24 Oct 2024
6 mins read
By: BlinkX Research Team

Fertilizer stocks include firms that produce and distribute fertilizers. Fertilizers are critical for increasing food output and ensuring enough food availability for everybody in India. Without fertilizers, farmers may have to clear more land for crops. This may accelerate deforestation and harm the ecosystem. So, it has a big influence on our life. As India's population and food consumption have increased, fertilizer stocks have emerged as a popular investment opportunity. Investing in these stocks helps you to diversify your portfolio while also gaining exposure to some of the performing firms. This article will discuss the 10 fertilizer stocks in India based on their PE ratio and for investors by further addressing why to invest, demonstrating future projections of this sector, and understanding the benefits and risks involved with the fertilizer sector stocks.

What are Fertilizer Stocks?

Fertilizer stocks are the publicly traded stocks of companies that produce, manufacture or distribute fertilizers. They are listed on stock exchanges in India. They manufacture and sell a variety of fertilizers based on nitrogen, phosphate, potash fertilizers, etc. They also include companies that produce natural gas, process ammonia, and conduct research on various plant nutrition products used in agriculture.

What are Fertilizer Stocks?
Top 10 Fertilizer Stocks List 2024
Overview of the Fertilizer Sector Stocks
Growth of fertilizer Stocks In India
Features Of fertilizer Stocks In India
How To Select the Best Fertilizer Stocks In India?
Why Should You Invest in Fertilizer Stocks In India?
How to Invest in Fertilizers Sector Stocks
Benefits of Investing in Fertilizers Sector Stocks
Risks Associated With fertilizer Stocks In India
Factors Affecting Fertilizer Stocks

Top 10 Fertilizer Stocks List 2024

Here is the top 10 fertilizer stocks list.

Company	5 Years CAGR (26th Aug’24)	P/E Ratio
Madras Fertilizers Limited	42%	13.8
Chambal Fertilisers and Chemicals Limited	27%	14.6
Gujarat Narmada Valley Fertilizers & Chemicals Limited	30%	19.3
Deepak Fertilizers & Petrochemicals	69%	26
National Fertilizers Limited (NFL)	40%	26
Paradeep Phosphates Limited	-	31.4
Tata Chemicals Limited	34%	35.2
Coromandel International Limited	35%	35.5
Rashtriya Chemicals & Fertilizers Limited	37%	70
Fertilizers And Chemicals Travancore Ltd	96%	299

Disclaimer: The information provided on the above stocks is for informational purposes only. It is crucial to conduct thorough research before making any investment decisions regarding these stocks. We do not recommend trading any stocks without comprehensive research and professional financial advice. Always consult with a certified financial advisor to ensure informed and appropriate investment choices.

Overview of the Fertilizer Sector Stocks

Let’s have a quick look at the fertilizer stocks in India.

Madras Fertilisers Limited

Madras Fertilisers Limited established in 1966 is a leading Indian fertilizer company headquartered in Chennai.
It produces a range of products including urea, ammonium sulphate, and complex fertilisers. Known for its robust manufacturing capabilities and focus on agricultural productivity.
The company plays a crucial role in enhancing crop yields and supporting sustainable farming practices across India.

Get more details about Madras Fertilisers Limited share price here.

Know the Madras Fertilisers Limited Share Price History here.

Chambal Fertilisers and Chemicals Limited

Established in 1985 Chambal Fertilisers and Chemicals Limited is a major Indian producer of nitrogenous fertilisers, including urea and ammonium nitrate.
With its headquarters in Kota, Rajasthan, the company emphasizes innovation and efficiency in its operations.
The company contributes significantly to the agricultural sector by improving soil health and crop productivity.

Get more details about Chambal Fertilisers and Chemicals Limited share price here.

Know the Chambal Fertilisers and Chemicals Limited Share Price History here.

Gujarat Narmada Valley Fertilisers & Chemicals Limited

Gujarat Narmada Valley Fertilisers & Chemicals Limited established in 1980 is a prominent player in India's fertilizer industry, based in Gujarat.
The company manufactures urea, ammonium nitrate, and complex fertilisers, focusing on enhancing agricultural output and promoting sustainable practices.
Its extensive distribution network supports farmers across the country.

Get more details about Gujarat Narmada Valley Fertilisers & Chemicals Limited share price here.

Know the Gujarat Narmada Valley Fertilisers & Chemicals Limited Share Price History here.

Deepak Fertilizers & Petrochemicals

Deepak Fertilizers & Petrochemicals established in 1979 is a key Indian firm involved in the production of fertilizers, including urea, ammonium nitrate, and specialty chemicals.
Headquartered in Pune, Maharashtra, the company also engages in petrochemicals and industrial chemicals.
It contributes to agricultural efficiency and industrial growth through its diverse product portfolio.

Get more details about Deepak Fertilizers & Petrochemicals share price here.

Know the Deepak Fertilizers & Petrochemicals Share Price History here.

National Fertilizers Limited (NFL)

National Fertilisers Limited (NFL) was established in the year 1974 is a major state-owned fertilizer manufacturer in India.
With a broad range of products including urea, di-ammonium phosphate (DAP), and complex fertilisers, NFL supports agricultural development across the nation.
Its extensive manufacturing and distribution network plays a pivotal role in enhancing crop yields and agricultural productivity.

Get more details about National Fertilizers Limited share price here.

Know the National Fertilizers Limited Share Price History here.

Paradeep Phosphates Limited

Established in 1981 Paradeep Phosphates Limited is a leading Indian producer of phosphatic fertilisers.
With a focus on single super phosphate (SSP) and complex fertilisers.
The company is located in Paradeep, Odisha, the company supports Indian agriculture by providing essential nutrients that improve soil health and crop performance, enhancing overall agricultural productivity.

Get more details about Paradeep Phosphates Limited share price here.

Know the Paradeep Phosphates Limited Share Price History here.

Tata Chemicals Limited

Tata Chemicals Limited established in 1939 is a diversified global company headquartered in Mumbai, India.
It operates in chemicals, fertilizers, and specialty materials, producing products like soda ash, caustic soda, and complex fertilizers.
Tata Chemicals is known for its commitment to sustainability and innovation, supporting agricultural and industrial sectors worldwide.

Get more details about Tata Chemicals Limited share price here.

Know the Tata Chemicals Limited Share Price History here.

Coromandel International Limited

Coromandel International Limited established in 1961 is a major Indian fertilizer company based in Hyderabad.
It manufactures a variety of fertilizers, including phosphate-based products, and focuses on improving soil health and crop yields.
The company is recognized for its robust distribution network and commitment to agricultural development and sustainability.

Get more details about Coromandel International Limited share price here.

Know the Coromandel International Limited Share Price History here.

Rashtriya Chemicals & Fertilisers Limited

Rashtriya Chemicals & Fertilisers Limited established in 1978 is a significant Indian public sector enterprise in the fertilizer industry.
Based in Mumbai, the company produces urea, complex fertilisers, and industrial chemicals.
It plays a crucial role in boosting agricultural productivity and supporting farmers through its extensive product range and nationwide distribution network.

Get more details about Rashtriya Chemicals & Fertilisers Limited share price here.

Know the Rashtriya Chemicals & Fertilisers Limited Share Price History here

Fertilisers And Chemicals Travancore Ltd

Fertilisers And Chemicals Travancore Ltd established in 1943 is a prominent Indian fertilizer manufacturer headquartered in Kochi, Kerala.
The company produces a range of products including urea, ammonium sulphate, and complex fertilisers.
It supports Indian agriculture by providing essential nutrients and enhancing crop yields, contributing to the country's agricultural sustainability.

Get more details about Fertilisers And Chemicals Travancore Ltd share price here.

Know the Fertilisers And Chemicals Travancore Ltd Share Price History here

Growth of fertilizer Stocks In India

India has a significant demand for fertilizers due to vast crop production. fertilizer firms play an important role in strengthening the agricultural industry by nourishing the soil with essential nutrients. Dominated by urea, DAP, and complex fertilizers, the Indian fertilizer sector has seen a major transition as a result of government support and the inflow of private enterprises. Forecasts indicate that the Indian fertilizer industry would grow rapidly due to population growth, changing food habits, and increased agricultural output.

Features Of fertilizer Stocks In India

The key features of fertilizer stocks in India are as follows.

Market Demand:

The demand of agricultural products impacts fertilizer stocks. Factors such as population growth and food consumption trends determine it.

Government Policies:

Government rules and policies involving subsidies, pricing, and import/export controls have a substantial influence on fertilizer stockpiles. Changes to these rules can impact the profit of fertilizer firms.

Raw Material Prices:

fertilizer manufacturing depends on raw materials such as natural gas, phosphates, and potassium. Prices for various raw materials fluctuate, which can have an impact on the cost structure and profits of fertilizer firms.

Seasonal Variations:

fertilizer needs vary seasonally. The demand is high during planting seasons. fertilizer stocks' earnings and stock values may fluctuate due to the variation in demand during different seasons.

How To Select the Best Fertilizer Stocks In India?

To choose the best fertilizer stocks in India, evaluate the company's financial performance, market share, and product portfolio. Conduct in-depth research on industry trends, government policies, and global fertilizer demand. Examine their competitive position, distribution network, and technical improvements to determine the growth potential. Check if they have an excellent management team. Also consider the production capacity, raw material procurement, and pricing strategies when making fertilizer stock investment selections.

Why Should You Invest in Fertilizer Stocks In India?

In India, more than 60% of the population is involved in agricultural activities. India's fertilizer sector is critical to increasing agricultural production and ensuring food security. The government of India intends to strengthen farmers, economically disadvantaged groups, and women by investing in the agriculture sector.

Furthermore, the Agriculture Accelerator Fund will be established to assist start-ups in the agricultural sector. So, India's fertilizer sector stocks may grow in future.

How to Invest in Fertilizers Sector Stocks

You should follow the steps mentioned below to invest in fertilizer sector stocks in India.

First, research properly and check the fundamentals of the company to invest in fertilizer stocks.
Check the manufacturing capacity and sustainability of a company.
Go through the financial statements, like the balance sheet of a company, before investing in it. Check its revenue growth and gross profits.
Invest in different stocks to properly diversify your portfolio.
Also, keep track of the market trends and adjust your portfolio if required.
In addition, remember to invest through a platform offered by a well-known and trusted brokerage firm.

Benefits of Investing in Fertilizers Sector Stocks

Fertilizer stocks in India offer the following benefits.

Diversification

Investing in fertilizer stocks can help you diversify your portfolio and obtain exposure to some of the top firms in this industry. This will allow you to curate a balanced portfolio along with various assets such as bonds, equities, and mutual funds.

High Growth Potential

The world population may grow more than 33% by 2050, increasing the demand for food. Further, the growing earnings in developing markets have led to a demand for high-quality food items. This requires higher inputs and the use of fertilizers for large-scale production. Therefore, investing in fertilizer stocks might give investors significant growth opportunities.

Risk Management

Investing in fertilizer stocks also helps in risk management since the industry often follows trends that differ from other industries. This allows investors to reduce their exposure to market risks and diversify their investments appropriately.

Export Restrictions

Stocks in the fertilizer business are occasionally subject to export restrictions. This keeps you informed of any changes in rules and regulations and adapt your holdings accordingly.

Access to Promising Companies

Investing in fertilizer stocks is especially advantageous for investors looking for long-term growth. This is because it allows them to invest in well-managed firms with the potential to create better returns.

Risks Associated With fertilizer Stocks In India

Although fertilizer stocks have many advantages, there are also some risks. The following are some of them.

Regulatory Risks:

In India, fertilizer firms must comply with government rules and policies, which can have an influence on their operations and profitability. Changes in subsidy programs, price restrictions, and environmental rules can all have an impact on fertilizer firms' financial success.

Commodity Price Volatility:

Fertilizer manufacturers are vulnerable to swings in the pricing of raw materials such as natural gas, phosphates, and potash. Changes in commodity prices can have an influence on fertilizer firms' production costs and profitability.

Weather and Agricultural Risks:

Fertilizer stock performance is highly related to agricultural sector performance. Weather and farming techniques both have an impact on this. Adverse weather circumstances, such as droughts and floods. Droughts and floods, for example, can reduce agricultural yields and increase fertilizer needs. This has an influence on fertilizer firms' sales and profitability.

Currency Risks:

Fertilizer firms in India may face currency risks if they import raw materials or export finished goods. Exchange rate fluctuations can have an influence on the cost of imported goods or the money earned by exports. This affects the entire financial success of fertilizer firms.

Factors Affecting Fertilizer Stocks

Here are some significant aspects influencing Fertilizers Sector Stocks:

Agricultural outputs

The success of fertilizer sector stocks is mostly determined by the region's agricultural production. If agricultural productivity is strong, there will be more demand for fertilizers, resulting in higher stock prices. However, if agricultural production is weak or uncertain due to weather or poor soil fertility, stock prices may fall.

Commodity Prices

The performance of fertilizer stocks is also influenced by commodity prices such as ammonium nitrate, urea, and phosphate rock. If commodity prices rise, firms in this area will see larger profits as demand for their products rises. However, if commodity prices are excessively low or erratic, these firms may incur losses. This may lead to a decrease in their stock prices.

Government policies

Government policies can have a considerable influence on the success of fertilizer stocks. Fertilizer manufacturers usually get subsidies and tax breaks to encourage agricultural expansion and assure food security. Changes in government legislation can therefore have an impact on the profitability of companies.

Technological Advances

Technological advancements can have an influence on the success of fertilizer stocks. Companies that can use innovative technologies faster might obtain a competitive edge. This may lead to an increase in their stock price.

Global Demand

Global demand for fertilizers is another major element influencing fertilizer sector stocks. As the world population grows, so does the demand for food, which drives up demand for fertilizer products from this market. This can lead to increased profitability for firms in this area, causing stock prices to rise.

Conclusion
India is the world's second-largest user of fertilizers. Moreover, the demand is likely to increase in the future. In addition, the Indian government encourages fertilizer production and usage. It is offering financial incentives to producers and farmers. So, the fertilizer stocks are expected to do well. Investing in them can offer diversification and high growth potential, along with other benefits. If you want to invest in fertilizer stocks in India, look for a good stock market app that offers a detailed analysis of each stock.

FAQs on Fertilizer Stocks

To analyse the performance of fertilizer stocks, check various financial metrics like price-to-earnings ratio, and earnings per share, debt-equity ratio.

Changes in policies of the government may impact the revenue and overall profits of fertilizer stocks. Hence, their share prices may rise or fall.

Yes, investors should diversify their holdings while investing in fertilizer stocks. It helps them to reduce losses if some stocks don’t perform well, as per the expectations.

Fertilizers play an important part in India's agricultural production. As a result, the leading fertilizer stocks offer a good investment opportunity for anyone interested in agriculture or the commodities market. However, before investing, one should consider their investment objectives and risk tolerance.

Economic recessions may affect fertilizer stocks. However, the impact may not be very big as they are considered as important commodities to ensure sufficient food production. Their demand doesn’t fall until the economic condition is very bad.