New Delhi, Oct 9 Complex fertiliser volumes in India are projected to grow by 2-4 per cent in the current fiscal (FY26), following a robust 9 per cent growth last year amid import availability issues, geopolitical disruptions, and a high base, a report said on Thursday.
However, credit profiles of fertiliser manufacturers will remain stable because of steady profitability, expected additional subsidy allocation and its timely disbursement, the report from Crisil Ratings said.
Incremental subsidy allocation by the government, as seen in the past, will keep the working capital requirement of the complex fertiliser manufacturers steady and support their credit profiles, the report said.
Analysts indicated that rising raw material prices due to supply disruptions could increase subsidy requirements.
The slowdown is due to a heavy dependence on imports for di-ammonium phosphate (DAP) and key raw materials, with about 60 per cent of DAP needs met by imports, while another key fertiliser nitrogen phosphorous potassium (NPK), is mostly made locally.
Complex fertilisers account for a third of the overall domestic fertiliser consumption, of which the NPK grades comprise 55 per cent and DAP the rest.
In the previous year, DAP volumes decreased by approximately 12 per cent, while NPK increased by around 28 per cent, as domestic producers focused on NPK due to high imported DAP prices.
In the last fiscal year, geopolitical uncertainties, including export curbs by China, which accounts for a third of India’s imports, impacted DAP availability globally.
The ratings agency forecasts a 4–6 per cent growth in NPK volumes this fiscal year, supported by an adequate monsoon, while DAP volumes are expected to remain unchanged due to high prices, though availability is expected to improve.
Anand Kulkarni, Director, Crisil Ratings, said that DAP availability will be supported by additional special compensation for DAP imports by the government, alternative arrangements such as a long-term agreement with Saudi Arabia, and easing trade tensions with China.
Over the rest of this fiscal year, NPK demand is expected to normalise as the trend of DAP degrowth reverses with increased availability, he added.
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