 "Fertiliser stocks zoom up to 7% amidst healthy monsoon expectations")
Shares of fertiliser companies rose up to 7 per cent on the BSE in Monday's intra day deals. Nagarjuna Fertilisers and Chemicals, Madras Fertilisers, and Rashtriya Chemicals & Fertilisers rose by 7.26 per cent, 6.54 per cent and 4.96 per cent intraday. By comparison the BSE Sensex was trading 0.39 per cent lower at 76,391 levels.
Others including the Fertilisers and Chemicals Travancore, National Fertilisers, Gujarat State Fertilisers and Chemicals, Chambal Fertilisers and Chemicals, Paradeep Phosphates and Deepak Fertilisers & Petrochemicals Corporation soared between 2-4 per each on Monday.
This comes amidst a favourable outlook for fertilisers companies as La Nina (associated with good rainfall in India) may set in during the Kharif season, which may drive healthy volume growth for Fertilisers companies.
IMD predicts above average monsoon (106 per cent of LTA) in 2024, indicating likely development of La Niña conditions during the second half of the monsoon season. Normal monsoon this year should be good for agriculture and important to drive the rural demand which will benefit sectors like agrochemicals, Fertilisers, tractors and FMCG, said analysts at Motilal Oswal.
India is a leading exporter of agrochemicals and the business environment is conducive for rapid export growth going forward. The Government and the Industry are working together to tap the opportunities to make India a global hub for agrochemicals.
Meanwhile, in the March quarter (Q4FY24), low reservoir levels and heat waves in the southern region impacted overall demand. However, northern and western regions saw good momentum and the outlook is now positive with the news around La Nina.
The Indian Fertilisers industry is on a robust growth trajectory, expected to reach a market size of Rs 1.38 lakh crore by 2032, with a Compound Annual Growth Rate (CAGR) of 4.2 per cent from 2024 to 2032, according to the latest report by IMARC Group.