The fertiliser market is projected to reach ~Rs. 1.38 lakh crore (~$17 billion) by 2032, growing at a CAGR of about 4.2 percent from 2024 to 2032.
Fertiliser production reached an impressive 45.2 million tonnes (MT) in FY24, with urea leading the charge at 31.4 MT. The government’s focus on boosting domestic production, particularly of nano-liquid urea, aims to stabilize prices and reduce reliance on imports.
There has been a notable decline in fertiliser imports, with urea imports down by 7 percent, DAP by 22 percent, and NPKs by 21 percent compared to the previous year. This shift aligns with the Atmanirbhar Bharat initiative aimed at reducing dependence on foreign sources.
For the fiscal year 2025, the Indian government has allocated a total of INR 1.64 trillion (~$20 billion) towards fertiliser subsidies. This includes Rs. 1.19 trillion for urea and ~Rs. 0.45 trillion for other nutrients under the Nutrient Based Subsidy (NBS) scheme.
Following are the three small-cap stocks to keep on your radar before the 2025-26 Budget:
1. Chambal Fertilisers & Chemicals Limited
With a market cap of Rs. 20,040.6 crores, the shares of one of India’s leading urea manufacturers surged by nearly 0.5 percent on BSE to Rs. 509 on Friday.
The company experienced a decline in its revenue from operations, showing a year-on-year fall of around 19.3 percent to Rs. 4,346 crores in Q2 FY25, but a growth of around 41 percent in net profit to Rs. 536 crores, over the same period.
In terms of key financial metrics, Chambal Fertilisers has a Return on Equity (RoE) of 17 percent and a return on capital employed (RoCE) of 20.2 percent. Additionally, the company’s debt-to-equity ratio stands at 0.01.
The stock has delivered positive returns of nearly xx percent in the last six months, as well as around xx percent returns year-to-date.
Chambal Fertilisers and Chemicals Limited is engaged in the business of production of urea, along with dealing with other fertilisers and agri-inputs. It produces nearly 12 percent of India’s total urea.
The company’s three state-of-the-art nitrogenous fertilizer plants, located in Kota (Rajasthan), have a combined annual production capacity of around 3.4 million MT. These plants, commissioned in 1994, 1999, and 2019, leverage advanced technologies from Denmark, Italy, the USA, and Japan.
2. National Fertilizer Limited
With a market cap of Rs. 5,904 crores, the stock surged by nearly 1.3 percent on BSE to Rs. 121.95 on Friday.
The company experienced a decline in its revenue from operations, showing a year-on-year fall of around 22.4 percent to Rs. 4,390 crores in Q2 FY25. In contrast, the PAT increased from a loss of Rs. 87 crores in Q2 FY24 to a profit of Rs. 12 crores in Q2 FY25.
In terms of key financial metrics, National Fertilizer has a Return on Equity (RoE) of 5.58 percent and a return on capital employed (RoCE) of 6.7 percent. Additionally, the company’s debt-to-equity ratio stands at 0.55.
The stock has delivered positive returns of nearly xx percent in the last six months, as well as around xx percent returns year-to-date.
National Fertilizers Limited is engaged in the production and marketing of neem-coated urea, bio-fertilizers (solid & liquid) and other allied industrial products like ammonia, nitric acid, ammonium nitrate, sodium nitrite and sodium nitrate.
The company is also engaged in the business of trading of imported and domestic fertilizers, compost, seeds, agro-chemicals and other agro-products.
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3. Paradeep Phosphates Limited
With a market cap of Rs. 9,827.4 crores, the shares of a leading company in India’s phosphatic fertilizer industry surged by nearly 6.3 percent on BSE to Rs. 121.5 on Friday.
The company experienced a significant growth in its revenue from operations, showing a year-on-year rise of around 4.4 percent to Rs. 3,844 crores in Q2 FY25, accompanied by around 155 percent increase in net profit to Rs. 227 crores, over the same period.
In terms of key financial metrics, Paradeep Phosphates has a Return on Equity (RoE) of 3.28 percent and a return on capital employed (RoCE) of 6.74 percent. Additionally, the company’s debt-to-equity ratio stands at 1.16.
The stock has delivered positive returns of nearly xx percent in the last six months, as well as around xx percent returns year-to-date.
Paradeep Phosphates Limited is primarily engaged in the manufacturing of urea, di-ammonium phosphate (dap), complex fertilizers of NPK grades, and zypmite (gypsum-based product), catering to the demands of farmers all over India through its “Navratna” brand of fertilisers.
The company is also involved in the business of trading fertilisers, ammonia, neutralised phospo gypsum, micronutrient and other materials.
Zuari Agro Chemicals Limited (ZACL) holds 28.05 percent of equity shares of Paradeep Phosphates Limited through its joint venture (JV) Zuari Maroc Phosphates Private Limited (ZMPPL).
Written by Shivani Singh
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