Fertiliser policy change to affect firms differently

Fertiliser companies are likely to pass on subsidy benefit to consumers

Analysts are cautiously optimistic on the profit margins of fertiliser companies, following a change in the government's policy on urea subsidy earlier this month.

Companies with high exposure in nitrogen (N) and sulphur (S), the two main nutrient-based crop fertility boosters, would tend to gain in the wake of the increase in subsidy. Those focusing on phosphate (P) and potash (K) based products might lose, on a cut in the subsidy.

Early this month, the Cabinet Committee on Economic Affairs (CCEA) approved a 20 per cent increase in the rate for nitrogen from Rs 15.854 a kg to Rs 18.989