The fertiliser market is projected to succeed in ~Rs. 1.38 lakh crore (~$17 billion) by 2032, rising at a CAGR of about 4.2 p.c from 2024 to 2032.
Fertiliser manufacturing reached a formidable 45.2 million tonnes (MT) in FY24, with urea main the cost at 31.4 MT. The federal government’s deal with boosting home manufacturing, significantly of nano-liquid urea, goals to stabilize costs and cut back reliance on imports.
There was a notable decline in fertiliser imports, with urea imports down by 7 p.c, DAP by 22 p.c, and NPKs by 21 p.c in comparison with the earlier yr. This shift aligns with the Atmanirbhar Bharat initiative aimed toward lowering dependence on overseas sources.
For the fiscal yr 2025, the Indian authorities has allotted a complete of INR 1.64 trillion (~$20 billion) in the direction of fertiliser subsidies. This contains Rs. 1.19 trillion for urea and ~Rs. 0.45 trillion for different vitamins beneath the Nutrient Based mostly Subsidy (NBS) scheme.
Following are the three small-cap shares to maintain in your radar earlier than the 2025-26 Finances:
1. Chambal Fertilisers & Chemical substances Restricted
With a market cap of Rs. 20,040.6 crores, the shares of one in all India’s main urea producers surged by almost 0.5 p.c on BSE to Rs. 509 on Friday.
The corporate skilled a decline in its income from operations, displaying a year-on-year fall of round 19.3 p.c to Rs. 4,346 crores in Q2 FY25, however a progress of round 41 p.c in web revenue to Rs. 536 crores, over the identical interval.
By way of key monetary metrics, Chambal Fertilisers has a Return on Fairness (RoE) of 17 p.c and a return on capital employed (RoCE) of 20.2 p.c. Moreover, the corporate’s debt-to-equity ratio stands at 0.01.
The inventory has delivered constructive returns of almost xx p.c within the final six months, in addition to round xx p.c returns year-to-date.
Chambal Fertilisers and Chemical substances Restricted is engaged within the enterprise of manufacturing of urea, together with coping with different fertilisers and agri-inputs. It produces almost 12 p.c of India’s complete urea.
The corporate’s three state-of-the-art nitrogenous fertilizer crops, positioned in Kota (Rajasthan), have a mixed annual manufacturing capability of round 3.4 million MT. These crops, commissioned in 1994, 1999, and 2019, leverage superior applied sciences from Denmark, Italy, the USA, and Japan.
2. Nationwide Fertilizer Restricted
With a market cap of Rs. 5,904 crores, the inventory surged by almost 1.3 p.c on BSE to Rs. 121.95 on Friday.
The corporate skilled a decline in its income from operations, displaying a year-on-year fall of round 22.4 p.c to Rs. 4,390 crores in Q2 FY25. In distinction, the PAT elevated from a lack of Rs. 87 crores in Q2 FY24 to a revenue of Rs. 12 crores in Q2 FY25.
By way of key monetary metrics, Nationwide Fertilizer has a Return on Fairness (RoE) of 5.58 p.c and a return on capital employed (RoCE) of 6.7 p.c. Moreover, the corporate’s debt-to-equity ratio stands at 0.55.
The inventory has delivered constructive returns of almost xx p.c within the final six months, in addition to round xx p.c returns year-to-date.
Nationwide Fertilizers Restricted is engaged within the manufacturing and advertising and marketing of neem-coated urea, bio-fertilizers (stable & liquid) and different allied industrial merchandise like ammonia, nitric acid, ammonium nitrate, sodium nitrite and sodium nitrate.
The corporate can be engaged within the enterprise of buying and selling of imported and home fertilizers, compost, seeds, agro-chemicals and different agro-products.
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3. Paradeep Phosphates Restricted
With a market cap of Rs. 9,827.4 crores, the shares of a number one firm in India’s phosphatic fertilizer trade surged by almost 6.3 p.c on BSE to Rs. 121.5 on Friday.
The corporate skilled a major progress in its income from operations, displaying a year-on-year rise of round 4.4 p.c to Rs. 3,844 crores in Q2 FY25, accompanied by round 155 p.c enhance in web revenue to Rs. 227 crores, over the identical interval.
By way of key monetary metrics, Paradeep Phosphates has a Return on Fairness (RoE) of three.28 p.c and a return on capital employed (RoCE) of 6.74 p.c. Moreover, the corporate’s debt-to-equity ratio stands at 1.16.
The inventory has delivered constructive returns of almost xx p.c within the final six months, in addition to round xx p.c returns year-to-date.
Paradeep Phosphates Restricted is primarily engaged within the manufacturing of urea, di-ammonium phosphate (dap), advanced fertilizers of NPK grades, and zypmite (gypsum-based product), catering to the calls for of farmers throughout India by its “Navratna” model of fertilisers.
The corporate can be concerned within the enterprise of buying and selling fertilisers, ammonia, neutralised phospo gypsum, micronutrient and different supplies.
Zuari Agro Chemical substances Restricted (ZACL) holds 28.05 p.c of fairness shares of Paradeep Phosphates Restricted by its three way partnership (JV) Zuari Maroc Phosphates Personal Restricted (ZMPPL).
Written by Shivani Singh
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