Fertiliser stocks in focus on hopes of normal monsoon; RCF surges 8%

GSFC, Paradeep Phosphates, Chambal Fertilisers, GNFC and Deepak Fertilisers were up in the range of 3% to 5% in intra-day trade.

Shares of fertiliser companies continued their upward movement, rallying by up to 8 per cent on the BSE in Thursday’s intra-day trade on hopes of normal monsoon.

 

Rashtriya Chemicals and Fertilizers (RCF), Gujarat State Fertilizers & Chemicals (GSFC), Paradeep Phosphates, Chambal Fertilisers & Chemicals, Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) and Deepak Fertilisers & Petrochemicals Corporation were up in the range of 3 per cent to 8 per cent in intra-day trade.

 

India Meteorological Department (IMD) on Tuesday predicted an “above normal” monsoon in 2025, which quantitatively could be 105 per cent of the Long Period Average (LPA). Last week, private weather forecasting agency Skymet also said that the cumulative all-India southwest monsoon this year could be “normal” at 103 per cent of the LPA. 

 

The forecast is with a model error of plus and minus 5 per cent. This is the second year running when the IMD has predicted an “above normal” monsoon. Last year in April, it had predicted monsoon to be almost 106 per cent while the actual rains were 108 per cent of the LPA.

 

Among the individual stocks, Chambal Fertilisers & Chemicals hit a new high of ₹674.50, gaining 3 per cent on the BSE in intra-day trade. In the past six trading days, the stock rallied 10 per cent; it soared 21 per cent in the past month.

 

Chambal Fertilisers is a large manufacturer of urea and markets bulk fertilisers such as Di-Ammonium Phosphate (DAP), NPKs and Muriate of Potash (MOP). Reliable supply channels, an established marketing network, and financial strength offer an opportunity to grow the volumes of bulk fertilisers, Crop Protection Chemicals (CPC) and Speciality Nutrients (SN) businesses.

 

Shares of Paradeep Phosphates (PPL) also hit a new high of ₹140.75, up 3.5 per cent in intra-day trade. In the past month, the stock zoomed 55 per cent. PPL is one of India’s largest private-sector phosphatic players, producing a wide range of phosphatic grades, including DAP, N-10, N-12, N-14, N-19, N-20 and N28. 

 

The management while announcing December 2024 quarter (Q3FY25) results on February 2, said the company maintained steady performance in production and sales over the past quarters, aided by favourable rainfall, moderate inventory levels, and government support. Given the growing need for food security, healthy soil, and balanced fertilization, coupled with favourable government policies, the fertilizer demand in the country is expected to remain strong, the management said.

 

Shares of RCF have surged 8 per cent to ₹143.75 on the back of over two-fold jump in average trading volumes. The company is engaged in manufacturing and trading fertilizers which are supplied to Customers (Farmers) through wholesale and retail dealers and manufacturing industrial chemicals which are sold for industrial use.

 

Meanwhile, structurally as well as in the short term, analysts at Elara Capital said they prefer fertilizer companies such as Coromandel International and Paradeep over the agrochemical sector given that the import replacement of volume and profits is set to play out for the fertilizer sector. The Fertilizer industry is also fully insulated from the impact of US tariffs. Further, China is not a major player in the Indian fertilizer industry because of huge barriers to entry, the brokerage firm said in a sector report.