- ProductsInvestment SuiteExclusiveFeatures
- PlatformTrading PlatformsFeatures and ToolsCalculatorsPricing
- ResearchResearch CallsResearch Reports
- MarketStocksIndicesMutual FundsIPO
- LearnStockshaalaResourceInvesting GuideEvents
- Partner
- Support
Exploring the Growth Potential of India's Fertilizer Stocks and Industry in 2025
- 5 min read 0•
- 02 Apr 2025
Fertiliser stocks are the shares of companies that are involved in production, manufacturing and distribution of fertilisers. These companies produce nitrogen, phosphate and potash-based fertilisers.
In India, agriculture is one of the largest sectors, contributing to both employment and GDP. This is why fertiliser stocks have been an attractive investment option for long-term investors looking to invest in the agriculture and commodity space.
Besides this, the fertiliser industry has been on an upswing due to the growing global food demand and government initiatives to promote agriculture. As an outcome, these stocks continue to offer great investment opportunities.
Read on to learn more about the potential of fertiliser stocks in India
India is an agricultural hub. Its vast lands and crop cultivation require a huge number of fertilisers. National Stock Exchange (NSE)-listed fertiliser stocks strengthen this sector. Over the years, this industry has grown considerably. Government subsidies, private investments and better production technology have driven this growth.
The fertiliser market is dominated by phosphate-based (DAP), nitrogen-based (urea), and potash-based fertilisers. The sector is growing due to increasing population, changing dietary habits and the need for more agricultural productivity.
The fertiliser industry is also growing as the government pushes for domestic production and aims to cut down on imports. Soil health cards, investments in nano and bio-fertilisers, and the direct benefit transfer (DBT) scheme are imperative plans shaping the industry’s future.
Union Budget 2024-25: Agriculture sector allocations
The government has shown commitment to boosting agricultural productivity through strategic investments and policy measures. Union Budget 2024-25 highlights allocations for the agriculture sector, benefiting both fertiliser manufacturers and farmers.
Crucial highlights include:
| Particular | Details |
|---|---|
Nano-DAP expansion | To use Nano-DAP across all agro-climatic regions to improve fertiliser efficiency and lower wastage. |
Atmanirbhar oilseeds abhiyaan | A strategic plan to become self-sufficient in the production of oilseeds and reduce dependence on imported products. |
Fisheries and blue revolution | Pradhan Mantri Matsya Sampada Yojana is an important scheme aims at improving aquaculture productivity, increasing exports, and generating employment. The Blue Revolution budget has been increased to ₹2,352 crore. |
Dairy sector development | Introduced to boost dairy production and enhance farmer incomes. |
Micro food processing enterprises | The PM Formalisation of Micro Food Processing Enterprises is a scheme aimed to receive ₹880 crore to assist small-scale food businesses. |
PM-KISAN scheme | Direct financial assistance provided to 11.8 crore farmers to ensure financial stability. |
Ministry of agriculture & farmers’ welfare | Allocated ₹1.27 lakh crore to improve agricultural infrastructure and farmer welfare schemes. |
eNAM expansion | Connecting 1,361 mandis to the eNAM network will assist agricultural trade worth ₹3 lakh crore. |
Crop insurance coverage | PM Fasal Bima Yojana aimed to extend crop insurance to four crore farmers. |
Features of fertiliser stocks
Various factors impact fertiliser stocks in India. Let's look out at some of the features:
- Government policies: Pricing controls, subsidies and regulations of import as well as export directly impact fertiliser companies’ profitability.
- Market demand: Growth in population and food consumption trends are directly related with agricultural growth and directly impact fertiliser demand.
- Seasonal variations: The demand for fertilisers tends to spike during sowing seasons. This causes the stock performance and sales to vary.
- Technological advancements: Innovations and advances in fertiliser manufacturing such as precision farming and bio-fertilisers enhance productivity and efficiency.
- Raw material costs: Fertiliser production depends on commodities such as natural gas, potash and phosphate. Fluctuations in the prices of such commodities may affect costs and profit margins.
Why invest in fertiliser stocks?
Investing in fertiliser stocks comes with various benefits. A few of them are:
- Growth potential: Increasing food demand owing to population growth will drive fertiliser consumption.
- Risk management: Fertiliser stocks do not usually follow overall market trends. This makes them useful for hedging risks.
- Regulatory awareness: Investors who remain informed about industry regulations can capitalise on emerging opportunities.
- Access to industry leaders: Investing in fertiliser stocks endows exposure to established companies having strong market positions.
What are the risks of investing in fertiliser stocks?
While fertiliser stocks offer growth potential, they have certain risks that you must be aware of:
- Regulatory risks: Government regulatory and policy changes on subsidies and environmental laws can impact profitability.
- Commodity price volatility: Raw material cost fluctuations affect production costs and company margins.
- Weather and agricultural risks: No or poor monsoons or any natural disaster can lower fertiliser demand. This may impact stock prices.
- Currency risks: Companies relying on imports for raw materials are vulnerable to currency fluctuations.
Factors to consider before investing
Prior to investing in fertiliser stocks, you should make sure to review:
- Market conditions: Global agricultural trends and economic indicators.
- Competitive vertical: Pricing strategies, market share, and production capacity of top fertiliser companies.
- Government regulations and policies: Trade restrictions, agricultural subsidies, and environmental policies.
- Future prospects: Mergers, new product innovations, and advancements in fertiliser technology.
Conclusion
India is the world's second-largest fertilizer consumer, with future growth in demand anticipated over the next few years. Government support through policy reforms and subsidies continues to strengthen the industry.
Investors looking for long-term growth opportunities can opt for fertiliser stocks, such as organic fertiliser stocks and sustainable farming technology companies. Before deciding on any stock, it is prudent to perform intensive industry research and keep yourself informed about fertiliser stocks news. This way, you can make wise decisions and achieve maximum returns.
FAQs
What is the future of fertiliser stocks in India?
The future of fertiliser stocks in India does look promising, driven by several factors including government support, technological advancements, and increasing agricultural demand.
Which stock is best for fertiliser?
There are many fertiliser stocks in India that are considered strong investment options for 2025. As an investor, you need to assess the growth rates and market positions before deciding on the best stock to buy.
Why are fertiliser stocks rising?
Fertiliser stocks are on a roll in India owing to a combination of favourable government policies, increasing agricultural demand and solid market performance.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed SEBI prescribed limit. The securities are quoted as an example and not as a recommendation. SEBI Registration No-INZ000200137 Member Id NSE-08081; BSE-673; MSE-1024, MCX-56285, NCDEX-1262.
Fertiliser stocks are the shares of companies that are involved in production, manufacturing and distribution of fertilisers. These companies produce nitrogen, phosphate and potash-based fertilisers.
In India, agriculture is one of the largest sectors, contributing to both employment and GDP. This is why fertiliser stocks have been an attractive investment option for long-term investors looking to invest in the agriculture and commodity space.
Besides this, the fertiliser industry has been on an upswing due to the growing global food demand and government initiatives to promote agriculture. As an outcome, these stocks continue to offer great investment opportunities.
Read on to learn more about the potential of fertiliser stocks in India
India is an agricultural hub. Its vast lands and crop cultivation require a huge number of fertilisers. National Stock Exchange (NSE)-listed fertiliser stocks strengthen this sector. Over the years, this industry has grown considerably. Government subsidies, private investments and better production technology have driven this growth.
The fertiliser market is dominated by phosphate-based (DAP), nitrogen-based (urea), and potash-based fertilisers. The sector is growing due to increasing population, changing dietary habits and the need for more agricultural productivity.
The fertiliser industry is also growing as the government pushes for domestic production and aims to cut down on imports. Soil health cards, investments in nano and bio-fertilisers, and the direct benefit transfer (DBT) scheme are imperative plans shaping the industry’s future.
Union Budget 2024-25: Agriculture sector allocations
The government has shown commitment to boosting agricultural productivity through strategic investments and policy measures. Union Budget 2024-25 highlights allocations for the agriculture sector, benefiting both fertiliser manufacturers and farmers.
Crucial highlights include:
| Particular | Details |
|---|---|
Nano-DAP expansion | To use Nano-DAP across all agro-climatic regions to improve fertiliser efficiency and lower wastage. |
Atmanirbhar oilseeds abhiyaan | A strategic plan to become self-sufficient in the production of oilseeds and reduce dependence on imported products. |
Fisheries and blue revolution | Pradhan Mantri Matsya Sampada Yojana is an important scheme aims at improving aquaculture productivity, increasing exports, and generating employment. The Blue Revolution budget has been increased to ₹2,352 crore. |
Dairy sector development | Introduced to boost dairy production and enhance farmer incomes. |
Micro food processing enterprises | The PM Formalisation of Micro Food Processing Enterprises is a scheme aimed to receive ₹880 crore to assist small-scale food businesses. |
PM-KISAN scheme | Direct financial assistance provided to 11.8 crore farmers to ensure financial stability. |
Ministry of agriculture & farmers’ welfare | Allocated ₹1.27 lakh crore to improve agricultural infrastructure and farmer welfare schemes. |
eNAM expansion | Connecting 1,361 mandis to the eNAM network will assist agricultural trade worth ₹3 lakh crore. |
Crop insurance coverage | PM Fasal Bima Yojana aimed to extend crop insurance to four crore farmers. |
Features of fertiliser stocks
Various factors impact fertiliser stocks in India. Let's look out at some of the features:
- Government policies: Pricing controls, subsidies and regulations of import as well as export directly impact fertiliser companies’ profitability.
- Market demand: Growth in population and food consumption trends are directly related with agricultural growth and directly impact fertiliser demand.
- Seasonal variations: The demand for fertilisers tends to spike during sowing seasons. This causes the stock performance and sales to vary.
- Technological advancements: Innovations and advances in fertiliser manufacturing such as precision farming and bio-fertilisers enhance productivity and efficiency.
- Raw material costs: Fertiliser production depends on commodities such as natural gas, potash and phosphate. Fluctuations in the prices of such commodities may affect costs and profit margins.
Why invest in fertiliser stocks?
Investing in fertiliser stocks comes with various benefits. A few of them are:
- Growth potential: Increasing food demand owing to population growth will drive fertiliser consumption.
- Risk management: Fertiliser stocks do not usually follow overall market trends. This makes them useful for hedging risks.
- Regulatory awareness: Investors who remain informed about industry regulations can capitalise on emerging opportunities.
- Access to industry leaders: Investing in fertiliser stocks endows exposure to established companies having strong market positions.
What are the risks of investing in fertiliser stocks?
While fertiliser stocks offer growth potential, they have certain risks that you must be aware of:
- Regulatory risks: Government regulatory and policy changes on subsidies and environmental laws can impact profitability.
- Commodity price volatility: Raw material cost fluctuations affect production costs and company margins.
- Weather and agricultural risks: No or poor monsoons or any natural disaster can lower fertiliser demand. This may impact stock prices.
- Currency risks: Companies relying on imports for raw materials are vulnerable to currency fluctuations.
Factors to consider before investing
Prior to investing in fertiliser stocks, you should make sure to review:
- Market conditions: Global agricultural trends and economic indicators.
- Competitive vertical: Pricing strategies, market share, and production capacity of top fertiliser companies.
- Government regulations and policies: Trade restrictions, agricultural subsidies, and environmental policies.
- Future prospects: Mergers, new product innovations, and advancements in fertiliser technology.
Conclusion
India is the world's second-largest fertilizer consumer, with future growth in demand anticipated over the next few years. Government support through policy reforms and subsidies continues to strengthen the industry.
Investors looking for long-term growth opportunities can opt for fertiliser stocks, such as organic fertiliser stocks and sustainable farming technology companies. Before deciding on any stock, it is prudent to perform intensive industry research and keep yourself informed about fertiliser stocks news. This way, you can make wise decisions and achieve maximum returns.
FAQs
What is the future of fertiliser stocks in India?
The future of fertiliser stocks in India does look promising, driven by several factors including government support, technological advancements, and increasing agricultural demand.
Which stock is best for fertiliser?
There are many fertiliser stocks in India that are considered strong investment options for 2025. As an investor, you need to assess the growth rates and market positions before deciding on the best stock to buy.
Why are fertiliser stocks rising?
Fertiliser stocks are on a roll in India owing to a combination of favourable government policies, increasing agricultural demand and solid market performance.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. Brokerage will not exceed SEBI prescribed limit. The securities are quoted as an example and not as a recommendation. SEBI Registration No-INZ000200137 Member Id NSE-08081; BSE-673; MSE-1024, MCX-56285, NCDEX-1262.