Fertliser stocks gain up to 4% as Budget announces measures for agriculture development

Gains in the fertiliser sector were led by Fertilisers and Chemicals Travancore shares, which were up 4%.

Shares of fertiliser companies rose as much as 4 percent as finance minister Nirmala Sitharaman announced several measures to support the agriculture sector  in the Union Budget 2025. Sitharaman announced initiatives to improve crop diversification, irrigation facilities as well as farmer income.

These measures to uplift the rural economy also went well for the fertiliser sector as farmers make up their prime consumer base. Moreover, the budget also announced several other measures to improve the productivity of the agricultural sector and provide a boost to rural consumption.

In addition, the budget also announced the setting up of a plant with 12.7 lakh MT annual capacity in Assam to further increase urea production for the fertiliser industry.

Following these announcement, stocks like Fertilisers and Chemicals Travancore (FACT), Chambal Fertilisers and Chemicals, Deepak Fertilisers, Gujarat State Fertilizers and Coromandel International rose upto 4 percent.

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Aside from measures to boost the rural economy, the finance minister did announce fertiliser subsidy estimates for FY26. Regardless. However, analysts had not hoped to see higher subsidies for the sector in the first place.

Global financial major Bank of America Securities had anticipated subsidies to not be lowered despite lower crude oil prices, along with some moderation in food inflation on average.

Shares of fertiliser stocks usually remain in focus ahead of the Budget as well, as investors speculate the subsidy bill for the sector.