Fertiliser stocks see pre-Budget bump; RCF, Madras Fertiliser, Coromandel surge 2-3%

Despite today’s market rally, fertiliser stocks have had a rough start to the year

Fertiliser stocks were buzzing with activity just two days ahead of the 2025 Union Budget presentation on January 30. Shares of key players, including RCF, Madras Fertiliser, Mangalore Chemicals and Fertilisers, National Fertilisers, Paradeep Phosphates, and Coromandel International, witnessed a notable upswing, climbing between 2 to 3 percent in an overall bullish market.

Market experts anticipate that the Finance Minister will allocate Rs 1.7 lakh crore towards fertiliser subsidies—marking a slight increase from the Rs 1.64 lakh crore set aside in FY25. This will be the second budget under the Modi 3.0 administration, and it is expected to emphasize organic alternatives through a higher allocation to the Market Development Assistance (MDA) scheme.

Launched in 2023 to promote organic fertilisers, the MDA scheme is slated to receive a budgetary boost, with an allocation of Rs 150 crore in FY26—up from Rs 100 crore in FY25. The initiative aims to encourage the use of organic fertilisers and manure, aligning with India’s long-term vision for sustainable agriculture.

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The government’s broader strategy includes reducing dependence on chemical fertilisers such as urea and NPK by advocating for organic and alternative options. Additionally, nano urea and nano DAP are being pushed as innovative solutions to curb the mounting subsidy burden on traditional fertilisers.

Looking ahead, if the upcoming Budget announces increased spending on rural infrastructure, agricultural subsidies, or key agrarian reforms, demand for fertilisers could receive a fresh boost—potentially driving stock prices even higher.

Meanwhile, analysts at Goldman Sachs predict that the government's overall expenditure on rural development, welfare programs, transfer schemes, and subsidies will likely hover around their pre-pandemic levels of approximately 3 percent of GDP in the upcoming Budget.

Despite today’s market rally, fertiliser stocks have had a rough start to the year. So far this month, shares of RCF, Madras Fertiliser, Mangalore Chemicals and Fertilisers, Paradeep Phosphates, and Coromandel International have plunged as much as 11 percent, significantly underperforming the Nifty 50 index, which has declined by 2 percent over the same period.

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