Companies in the private sector remain wary of committing large investments to urea manufacturing
Fertiliser stocks have gained momentum ahead of the 2025 Union Budget, driven by speculation about subsidy allocations.
A significant portion of granular fertilisers can be substituted with Nano fertilisers
As Nirmala Sitharaman's Budget nears, the fertiliser sector is back with speculations over the subsidy bill for FY25, even as raw material prices sit on a decline.
With subsidy bill in check, the government should step up focus on nano urea and expansion of domestic manufacturing capacity base
The allocation for the fertiliser sector has been increased from 5.5 lakh tonnes per annum to 7.5 lakh tonnes per annum of Green Ammonia.
Attempts to free sugar mills from government control ended because the mills couldn’t cope with populist sugarcane pricing and production gluts. Decontrol of prices of phosphatic and potassic fertilisers was reversed after a decade of moderate success because of global supply shocks. Complete deregulation will have to wait for a developed India
Government support, utilization of new capacity to cater to the rising demand, and continued forays into production of the more efficient and sustainable nano urea are expected to keep the Indian fertilizer industry buoyant
The report said the credit profile of the fertiliser sector is expected to witness a significant improvement in this new fiscal year, driven by the removal of the subsidy backlog following the pay-out of additional subsidy of Rs 62,602 crore by the government under the Aatmanirbhar 3.0 package.
The move will help reduce the government's fertiliser subsidy bill by up to 20 per cent through plugging diversion and leakages.
After two years of poor rainfall, good progress of monsoon and favourable agro-climatic conditions have helped in improved outlook for the fertiliser sector in the second half of this fiscal and is set to remain stable, an ICRA report said.
Deepak Fertilisers and Petrochemicals Corporation and Smartchem Technologies have jointly filed an application for initiation of anti-dumping investigation concerning imports of ammonium nitrate from these nations.
The government has fixed the maximum retail price (MRP) of urea at Rs 5,360 per tonne and the difference between the cost of production and the MRP is reimbursed to the manufacturers. In case of uera, the subsidy constitutes more than 75 percent of the cost of production.
Urea is a controlled fertiliser and is sold at a fixed selling price of Rs 5,360 per tonne. The difference between cost of production and selling price is paid as subsidy to manufacturers.
As rainfall has been weak in several parts of the country and increase in the inventory levels, fertiliser volumes may witness moderation in the coming months, ICRA's report said.
"Although actual rainfall and monsoon precipitation so far has been significantly better than earlier estimates of Indian Meteorological Department growth outlook for the industry appears more cautious for FY16," ICRA said in a report.
ICRA expects overall subsidy for FY14 to be in the range of Rs. 650-700 billion for fertiliser sector. Demand outlook positive for FY14, but currency depreciation and subsidy delays pose challenges for Indian Fertiliser Sector, says ICRA.
India Ratings has maintained a Stable Outlook on its rated fertiliser companies despite persistent issues like delays in reimbursement of subsidies, delays in initiation of key policy reforms and volatility in key input prices.
The fertiliser sector is one of the important sectors for the growth of agriculture in India.
Emkay Global Financial Services has come out with its report on fertiliser sector. The research firm maintains accumulate rating on GSFC.
PINC Research has come with its quarterly earning estimates for fertiliser sector.
In an interview to CNBC-TV18, SP Tulsian of sptulsian.com shares his calls on the ADAG stocks that saw a bounce today and the fertiliser sector. He says as Reliance Industries is looking to use the infrastructure of Reliance Communication, it is probably the reason for the bounce in the stock.
PINC Research has come out with its report on fertiliser sector.
David Pezarkar, Head - Equity, Daiwa Mutual Fund feels that one should look fertiliser sector with long term perspective.
R Mukundan, MD of Tata Chemicals, in an interview on CNBC-TV18 said that the company’s operating performance was impacted due to the sever winter faced in the UK and that the situation on the ground in terms of demand or a pullback in demand was not critical at this point in time.