Outlook for the on-going Rabi season remains encouraging, said Motilal Oswal Financial Services.
In a report, it cited that fertiliser and agrochemical players are also likely to report healthy performances in 2HFY21.
“Farm income was impacted in some states, mainly due to lower yield on account of untimely rains,” the report said.
“Nevertheless, volumes in fertiliser and agrochemical increased strongly on the back of a good monsoon season.”
As per the Ministry of Fertiliser, sales in 1HFY21 grew 15 per cent YoY to 34 million mt, driven by 28 per cent and 24 per cent volume growth in DAP and NPKS, respectively.
Similarly, Urea volumes grew 7 per cent YoY.
“Industry volumes improved on the back of above-normal monsoon rainfall for the second consecutive year,” it said.
“Good monsoons led to a 5 per cent YoY increase in sowing area to 111.7m hectares.”
Of the total fertiliser sales, the report said highest volume growth of 28 per cent and 24 per cent was seen in DAP and NPKS, respectively, in 1HFY21.
“Urea, which accounted for 49 per cent of total fertilizer volumes, grew 7 per cent in 1HFY21.”