These 3 Indian companies benefit from China's specialty fertilizer ban

Chinese President Xi Jinping

China has stopped supply of specialty fertilizers to India for the last two months, which help in increasing the yield of fruits, vegetables and other crops. According to media reports, China, which is a large supplier of agricultural materials at global level. For the last 4-5 years, China was limiting the supply of these fertilizers to India, but this time it has been completely stopped. However, these 3 companies of India can benefit from this decision of China.

Specialty fertilizers such as water-soluble, micronutrients, nano and bio-stimulants improve soil health and ensure better use of nutrients. These are non-subsidized products. India imports 1.5-1.6 lakh tonnes of fertilizers every year between June and December. But their local production in India is limited as there was a shortage of technology and earlier low demand. Now demand is increasing, and many companies are planning to start production in this sector. These 3 Indian companies can get a big opportunity due to stopping China's supply.

Deepak Fertilizers & Petrochemicals Corporation (DFPCL)

Deepak Fertilizers is a leading company of fertilizers and industrial chemicals in India. The company works in segments such as mining chemicals, industrial chemicals and crop nutrition, and its plants are in Maharashtra, Gujarat, Andhra Pradesh and Haryana. The company has 48 products in specialty fertilizers, such as water-soluble fertilizers, bio-stimulants, micronutrients and secondary nutrients.

These products get support from testing on strong R&D and more than 50,000 farmer demo plots. This has seen improvement in cotton, sugarcane, onion, fruits and vegetables yield and quality. With the stoppage of China's supply, Deepak Fertilizers will get a chance to fulfill domestic demand. The company's sales and net profit has been growing 5.2% and 44.2% in the last 5 years. Roe and ROCE are also more than 13.9% and more than 16%. The company is investing Rs 43.5 billion to increase the capacity of ammonia to 6,28,700 MTPA by FY26 and Rs 22.01 billion to increase the capacity of technical ammonium nitrate to 8,62,900 MTPA.

Nagarjuna fertilizers and chemicals

Nagarjuna Fertilizers Plant Nutrients, Micro Irrigation Equipment and Agri-Informatics Services. Its products include many products such as urea, ammonia, diamond phosphate (DAP), Muriant of Potash (MOP) and Kelated Micronutrients. The company has three main segments: Straight Nutrition, Nutrition Solutions and Management Services. The growing presence of the company in specialty fertilizers, especially in the Called micronutrients and customized blends, makes it in a position to take advantage of stopping China's supply. However, from FY20 to FY24, the company's sales had a 19.7% CAGR degreth and it is currently a loss-making company. Nevertheless, the company is planning to increase its reach.

UPL

The UPL is a global leader in crop protection and plant nutrition and works in more than 130 countries. It produces fertilizers, pesticides and specialty chemicals. In specialty fertilizers, UPL is focusing on innovative products, such as UPL Foltron, a 100% water-soluble nanotechnology based fertilizer, which enhances the absorption of neutrients, strengthens the immunity of plants and improves fruits. The Gain of the UPL improves екса, a liquid fertilizer, absorption and photosynthesis of nutrients, leading to increase yields. The demand for UPL may increase by stopping China's water-soluble and supply of Nano fertilizers. The company's revenue has been a CAGR growth of 14.6% in the last 5 years, although the loss in FY24. ROCE and ROE are 26% and 23.7% on average. The company is planning to increase its capacity.