Domestic sales volume of complex fertilisers to grow by 4-5% in fiscal 2025, says CRISIL

Domestic sales volume of complex fertilisers will revert to the historical growth rate of 4-5 % in fiscal 2025 after a strong 7-8 % jump in this fiscal.

Lower volatility in raw material cost will support commensurate nutrient-based subsidy (NBS) by the government.

It will help improve operating profitability of manufacturers to a normalised level of about Rs 4,000- Rs 4,500 per tonne next fiscal.

Timely release of subsidies will keep working capital requirements low for fertiliser makers and credit profiles stable.

The high volume growth this fiscal is riding on better availability and record pre-buying by farmers.

The medium-term growth outlook for complex fertilisers is positive as balanced soil nutrition is imperative for better productivity and yields.

Declining raw material prices in the first half led to a slashing of NBS rates for DAP and NPK grades by 40% for the second half.

Prices of raw materials such as phosphoric acid, ammonia, rock phosphate and sulphur subsequently rose and are higher than first-half levels.

Operating profitability of complex fertiliser makers is expected to decline 30-35% to Rs 3,000 - Rs 3,500 per tonne this fiscal.s.

Next fiscal, profitability is expected to normalise to Rs 4,000- Rs 4,500 per tonne.