Not Reliance, Not Adani: These 4 fertiliser stocks are India’s real green hydrogen plays

Hydrogen is already widely used in industries such as refining, steel and fertilisers. As renewable power capacity expands, green hydrogen could gradually become an alternative to fossil-fuel based hydrogen.

Why Ammonia is the ‘Missing Link’ in India’s Hydrogen Mission

The fertiliser sector sits at the centre of this transition. Ammonia, the key input used in nitrogen fertilisers, requires hydrogen during production. Today this hydrogen is largely produced using natural gas. That is why fertiliser production costs are closely linked to gas prices.

Fertiliser stocks have also been in focus recently due to tensions in the Gulf region, which have raised concerns about gas supplies and price volatility. If green hydrogen becomes commercially viable over time, fertiliser companies could reduce their exposure to gas-based feedstock and diversify their hydrogen sources.

This transition could gradually create a new structural opportunity for the sector. Fertiliser manufacturers already operate large ammonia plants where hydrogen is consumed. As green hydrogen projects expand in India, these plants could potentially integrate cleaner hydrogen feedstock into ammonia production. Over time, this could support lower-carbon fertiliser manufacturing and align the sector with India’s broader energy transition goals.

Against this backdrop, companies with large ammonia production capacity and established fertiliser manufacturing infrastructure stand out. These companies already operate the facilities where hydrogen is used at scale. Their existing ammonia plants and integration across the fertiliser value chain place them among the natural candidates to adopt green hydrogen in the future as the ecosystem develops.

#1 Coromandel International: Scaling the Backward Integration Wall in Agri-Solutions

Coromandel International is one of India’s leading agri solutions providers. It offers a diverse range of products and services across the farming value chain. It specialises in fertilizers, crop protection, bio pesticide, specialty nutrients, organic fertilisers, etc.

Q3 Performance & Input Cost Pressures

Coromandel International reported steady performance in Q3 FY26. The company recorded total income of about Rs 8,863 crore. This was up around 26% year-on-year (YoY). Net profit stood at Rs 488 crore, slightly lower than Rs 508 crore last year. Higher raw material costs and currency pressure affected margins.

The quarter was difficult for fertiliser companies. Input costs rose sharply. Prices of sulphur, sulphuric acid and phosphoric acid moved up. Ammonia prices also increased due to supply disruptions. Fertiliser consumption fell about 7% as unseasonal rains affected crop activity.

Despite this, Coromandel maintained strong operations. Fertiliser plants ran at full capacity. Production reached a record 9.9 lakh tonnes, up 18% YoY. Sales were 11.2 lakh tonnes, broadly similar to last year. The company also expanded its presence in markets such as Maharashtra, Karnataka and Tamil Nadu.

Expansion projects are progressing. Backward integration plants for sulphuric acid and phosphoric acid at Kakinada are nearing commissioning. A granulation expansion project is also underway. This is expected to be commissioned in FY27. These projects should improve raw material integration.

The company also continues to strengthen raw material sourcing. Its Senegal rock phosphate mine has stabilised operations. Production is expected to reach about 3.5 lakh tonnes this year. The company plans to scale this up to 5 lakh tonnes in the future. This helps secure supply and reduce dependence on global markets.

Looking ahead, another development to watch is the push toward green hydrogen. Ammonia production needs hydrogen, and at present this hydrogen mostly comes from natural gas. If green hydrogen production increases in India, fertiliser plants may eventually have another source of hydrogen for making ammonia.

Companies like Coromandel already operate large fertiliser plants, so they could adapt if the industry gradually starts using cleaner hydrogen.

In the past year, share price of Coromandel International share price is 14.9%.

Coromandel International 1 Year Share Price Chart

#2 Chambal Fertilisers & Chemicals: Dominating the Urea Landscape through Gadepan’s Low-Cost Scale

Chambal Fertilisers & Chemicals is engaged in production of Urea from its own manufacturing plants. It also markets/ deals in other fertilisers and agri-inputs.

Chambal Fertilisers & Chemicals reported stable performance in the December quarter. Revenue stood at about Rs 4,080 crore in Q3 FY26, compared with around Rs 4,010 crore a year earlier. This reflects growth of about around 2% YoY. Net profit came in at about Rs 509 crore, up roughly 14% YoY.

Gas Volatility & Production Stability

The quarter remained challenging for the fertiliser industry. Natural gas prices stayed volatile. Gas is the key feedstock for ammonia and urea production. Supply disruptions in global gas markets also pushed ammonia prices higher. This kept input costs elevated for fertiliser producers.

Chambal operates three large urea plants at Gadepan in Rajasthan. Together they have a production capacity of about 3.4 million tonnes per year. The plants continued to run at stable utilisation levels during the quarter. The company is also working on plant efficiency and energy optimisation projects.

The company continues to strengthen its distribution network. It has expanded its presence in key agricultural states such as Rajasthan, Madhya Pradesh and Uttar Pradesh. Its rural retail network also supports sales of fertilisers, crop protection products and seeds.

Over the long term, companies with large ammonia capacity could benefit from this transition. Chambal already operates large-scale urea plants. This places it well if the industry gradually moves toward low-carbon ammonia and fertiliser production.

In the past year, share price of Chambal Fertilisers & Chemicals share price tumbled 23%.

Chambal Fertilisers & Chemicals 1 Year Share Price Chart

#3 Deepak Fertilisers & Petrochemicals Corporation: Running the Mining Explosives Boom via Technical Ammonium Nitrate (TAN)

Incorporated in 1979, Deepak Fertilisers and Petrochemicals Corporation is in the business of fertlisers, agri services, bulk chemicals, mining chemicals and real estate.

Deepak Fertilisers and Petrochemicals Corporation reported mixed performance in the December quarter. Revenue stood at about Rs 2,830 crore in Q3 FY26. This was around 10% higher YoY. Net profit came in at Rs 141 crore, down about 34% YoY due to higher input costs and weaker realisations in some chemical segments.

The quarter was affected by external factors. Extended monsoon rains slowed mining activity. This reduced demand for technical ammonium nitrate (TAN), a key product used in mining explosives. At the same time, global ammonia prices increased. This pushed up input costs for TAN and nitric acid businesses.

Strategic Expansion & Energy Sourcing

The company is progressing with major expansion projects. The Gopalpur technical ammonium nitrate plant is about 91% complete. The Dahej nitric acid project has reached around 79% completion. Both projects are expected to be commissioned in FY27. These projects should improve capacity and margins.

Deepak Fertilisers is also strengthening its energy sourcing. The company has signed a 15-year LNG supply contract with a global supplier. This could reduce gas costs in the coming years. Lower gas costs would improve ammonia economics and support profitability across the chemical chain.

Ammonia remains central to the fertiliser and industrial chemical sectors. Today it is largely produced using natural gas. Over time, the shift toward green hydrogen could change how ammonia is produced. Companies with large ammonia and nitric acid facilities may benefit if cleaner hydrogen becomes viable.

Deepak Fertilisers already operates across the ammonia and downstream chemical chain. This gives it a base to adapt if the industry gradually moves toward low-carbon ammonia production in the future.

In the past year, share price of Deepak Fertilisers and Petrochemicals Corporation share price is down 13.8%.

Deepak Fertilisers and Petrochemicals Corporation 1 Year Share Price Chart

#4 Gujarat Narmada Valley Fertilisers and Chemicals: Banking on the Chemical-Fertiliser Hybrid Model to Offset Global Volatility

Gujarat Narmada Valley Fertilisers & Chemicals (GNFC), is a joint sector enterprise promoted by the Gujarat State Investments (GSIL), a Government of Gujarat undertaking, and the Gujarat State Fertilizers & Chemicals (GSFC). The company was set up in Bharuch in 1976 while its manufacturing and marketing operations were started in 1982. 

GNFC reported moderate growth in the December quarter. Total revenue stood at about Rs 2,093 crore in Q3 FY26, compared with around Rs 2,056 crore a year earlier. This reflects growth of about 2% YoY. Net profit came in at Rs 150 crore, slightly lower than Rs 158 crore in the same quarter last year.

Revenue growth during the quarter was largely supported by higher volumes in the chemical segment. However, profitability was affected by lower other income and softer realisations in some products. Lower input costs and higher volumes partly offset this pressure.

The company operates an integrated fertiliser and chemical complex at Bharuch and Dahej. Chemicals remain the larger contributor to revenue. In Q3 FY26, the chemicals segment generated about Rs 1,235 crore, while the fertiliser segment contributed about Rs 734 crore. The fertiliser segment continued to report losses, though the losses narrowed during the quarter due to better realisations and lower input costs.

GNFC is also progressing with several capacity expansion projects. The company is setting up a coal-based steam and power plant at Dahej. It is also expanding its ammonia capacity at Bharuch and adding new facilities for weak nitric acid and ammonium nitrate. These projects are expected to be completed over the next few years and should improve energy efficiency and strengthen the company’s market position.

For GNFC, its integrated ammonia and chemical operations provide a base for such a green hydrogen. The company already uses ammonia as a key feedstock across fertilisers and downstream chemicals. Over time, the hydrogen transition could open new opportunities for manufacturers that operate large ammonia-linked industrial chains.

In the past year, share price of Gujarat Narmada Valley Fertilisers & Chemicals share price is down 12%.

Gujarat Narmada Valley Fertilisers & Chemicals 1 Year Share Price Chart

Valuations

Let’s now turn to the valuations of the companies in focus, using the Enterprise Value to EBITDA multiple as a yardstick.

Valuations of Companies in focus

Sr No	Company	EV/EBITDA Ratio	5-Year Average EV/EBITDA	Industry Median	ROCE	ROE
1	Coromandel International	16.8	11.7	8.4	23.2%	16.9%
2	Chambal Fertilisers and Chemicals	5.9	7.6		26.8%	19.8%
3	Deepak Fertilisers and Petrochemicals Corporation	8.5	7.4		15.7%	15.6%
4	Gujarat Narmada Valley Fertilisers and Chemicals	4.9	5.2		7.5%	8.1%

Return ratios show a gap between the companies. Chambal Fertilisers and Coromandel International report the strongest returns. Chambal has Return on Capital Employed (ROCE) of 26.8% and Return on Equity (ROE) of 19.8%. Coromandel reports ROCE of 23.2% and ROE of 16.9%. Deepak Fertilisers shows moderate returns with ROCE of 15.7% and ROE of 15.6%. GNFC reports lower profitability with ROCE of 7.5% and ROE of 8.1%.

Valuations are also different across the group. Coromandel trades at 16.8 times EV/EBITDA, which is higher than its five-year average of 11.7 and above the industry median of 8.4. Deepak Fertilisers trades at 8.5 times, close to its five-year average of 7.4. Chambal Fertilisers trades at 5.9 times, below its five-year average of 7.6. GNFC trades at 4.9 times, slightly below its five-year average of 5.2.

Conclusion

The fertiliser sector remains closely linked to natural gas. Ammonia, the main input for nitrogen fertilisers, is produced using gas. This means changes in global gas prices can affect fertiliser companies. Recent tensions in the Gulf have once again brought this issue into focus.

At the same time, India is trying to build a green hydrogen industry. In the long run, hydrogen from renewable energy could be used to produce ammonia. This may slowly reduce dependence on natural gas.

Coromandel International, Chambal Fertilisers, Deepak Fertilisers and GNFC operate across fertilisers and ammonia-linked chemicals. Their businesses depend on the ammonia value chain. These companies may be worth watching as the sector deals with gas price volatility and possible changes in ammonia production.

You can track how these benefit from commercialization of green hydrogen by adding stocks to your watchlist.

Disclaimer:

Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. 

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. 

Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to deep dive into the world of companies, studying their performance, and uncovering insights that bring value to her readers.

Disclosure: The writer and her dependents do not hold the stocks discussed in this article. 

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