First it was rare earth magnets, now it’s fertilisers.
China has halted shipments of speciality fertilisers used to increase the yields of fruits, vegetables, and other remunerative crops to India for the last two months, according to media reports.
However, China, a global supplier of agricultural inputs, continues to export them to other nations.
China has been restricting suppliers of speciality fertilisers to India for the last four to five years. However, this time, it’s a complete halt.
Speciality fertilisers, including water-soluble, micronutrient, nano and bio-stimulant variants, are non-subsidised products that improve soil health and nutrient efficiency.
India typically imports 150,000–160,000 tonnes of such fertilisers in the June–December window.
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Local production remains limited due to a lack of technology and low historical demand.
However, many firms are active in this space and rising demand is prompting interest in setting up domestic manufacturing.
With China halting the supply of fertilizer, here are 3 stocks set to benefit…
#1 Deepak Fertilisers and Petrochemicals Corporation
First on the list is Deepak Fertilisers and Petrochemicals Corporation.
The company is a leading Indian manufacturer of fertilisers and industrial chemicals. The company operates across key segments including mining chemicals, industrial chemicals, and crop nutrition, with plants in Maharashtra, Gujarat, Andhra Pradesh, and Haryana.
In the speciality fertiliser segment, DFPCL offers a wide range of 48 products such as water-soluble fertilisers, bio-stimulants, micronutrients, and secondary nutrients. These products are backed by strong R&D and extensive field trials at over 50,000 farmer demo plots.
The R&D efforts have shown clear improvements in crop yield and quality across cotton, sugarcane, onion, fruits, and vegetables.
Now, with China pausing exports of speciality fertilisers, Deepak Fertilisers is well-positioned to fill the gap and cater to growing domestic demand.
Coming to financials, sales and net profit have grown at a 5-year CAGR of 5.2% and 44.2%, respectively. The returns have been strong, with the RoE and RoCE averaging over 13.9% and 16%, respectively.
Going forward, the company has earmarked a large investment of Rs 43.5 billion (bn) to increase its capacity of ammonia to 628,700 MTPA by FY26.
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