Published: 06th July 2024
By: Value Research
The fertiliser industry has been reeling. In FY24, major players reported sharp erosion in profits. For example, Gujarat State Fertilisers’ net profit slumped 89% for the year!
The first blow came from erratic monsoons, reducing crop production and demand for fertilisers. This led to lower industry volumes across the board.
Government subsidies were lowered for FY24. This move, based on optimistic raw material cost forecasts, backfired as costs spiked unexpectedly.
Subsidies are paid to companies to compensate for the gap between their production costs and government-regulated retail prices. So that they remain viable!
Any hope of recovery depends on the monsoon and subsidy rates. Some players have warned that the subsidy mismatch can cost them their operational viability!
Recent caps on profit margins make things worse, where only the fittest can survive. Our full story compares key ratios of top players, illustrating their efficiency. Click the link below.