Agriculture Stocks in India Promising Investment Opportunity?

While innovation has always been beneficial to the economy and the agriculture industry as well, it may not always be beneficial for every company. An example could be where one company produces a particular variant of fertilizer and the innovation of a new and better version of the said fertilizer could hamper sales of the current fertilizer. Also, if the company is not able to come up with its own version of the new fertilizer, a competitor may capture the market share of the company. Further, any change in government policies related to ethanol blending would impact the profitability of the company.

Following the Indian government’s recent incentive programme for manufacturing drones and the relaxation of laws against flying drones, Zen Tech has seen a significant boost in production. An incentive plan of Rs.120 crores has been authorized by the government for the next 3 years. Zen Tech could very well be a leading player in this sector and has currently set a target price of Rs.300. The agribusiness company, a part of the highly diversified Godrej Group, has generated a negative return of 2% over the last one year.

Best Agriculture Stocks to Buy in India 2022

This could significantly impact the revenues of the company and affect the overall growth rate. From the start of 2020, the stock market and the economy have been grappling with the COVID-19 pandemic. Various economies are unsure of the end given the uncertainty in vaccine effectiveness. Never before has the globe witnessed a standstill and without a doubt some sectors will take time to get back to pre-covid levels. Agricultural and allied sectors as a broader theme may aid to navigate these turbulent times.

Here’s why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster. The lowest net profit margin over the past years is 21% which is very high in itself. Loopworm is an agri biotech firm that uses organic waste to produce novel bio based products. It is currently developing alternative sustainable protein & fats for shrimp feeds, poultry feeds, and pet foods. On a CAGR basis, its revenues have increased by 27% in the past five years.

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In Morocco, the firm maintains a joint venture that produces phosphoric acid. DCM Shriram is a conglomerate with subsidiaries in a variety of industries, including energy and agriculture. This firm manufactures a wide range of products, including fertilisers, caustic soda, calcium carbide, textiles, cement, and other materials. This company’s production facilities are in Rajasthan, Gujarat, and Uttar Pradesh. Financial risks could emerge relating to not having sufficient cash to meet expected obligations, generating lower than expected profits and losing market share.

The above mentioned stocks offer growth opportunities but are also under the threat of being washed away by competition. Way back in 2014 it had acquired Genome Agritech to extend its operations in the agritech sector. For the financial year, 2022 India Pesticides reported a total income of Rs 7,293 m. Last month ORO Agri and UPL entered into a collaboration to co-distribute a bio solution. This bio-solution can be used for crop protection against various pests and diseases.

Bird feeds, animal feeds, agrochemicals, poultry-based products, and palm oil plantations. Also offered are cold storage, newspaper, and film manufacturing services, as well as a wide range of fungicides and other pesticides, as well as a variety of pharmaceutical intermediates and rubber compounds. The agriculture-related stocks mentioned below have the largest 3-month Average trading volume. However, its profit margins have remained very high over the past years.

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Readers like you are an inspiration for us to move Agri Journalism forward. We need your support to keep delivering quality Agri Journalism and reach the farmers and people in every corner of rural India. PI Industries’ business profile is backed by the product and geographic diversity, especially in the custom synthesis and CSM business. With a solid product lineup, supportive policy environment, and normal monsoon, the domestic business is also expected to improve over the medium term.

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Now, since India is an agricultural cultural country, the whole world is eyeing India for rapid developments in the agriculture sector. UPL is planning to become bio science company that focuses on active use of technology for sustainable agriculture. It has critical data on farming patterns that it plans to use in collaboration with companies around the world to develop R&D led digital solutions in the Bioscience sector. 50% of the total employed population is employed in the agriculture sector. Hence, change in the agriculture sector will bring a massive change in the overall market scenario.

The country sees 15-25% crop loss due to pests, diseases, and inadequate CPC usage and is coupled with the per hectare consumption of agrochemicals in India at just 0.6 kgs as compared to 5-7 kgs in US and kgs in Japan. The low CPC penetration, increasing labor cost and climate change are likely to act as the main growth drivers for CPC in India. With close to 3.5 million-ton capacity of fertilizers, Coromandel accounts for about 22% of the domestic production capacity in India. PI Industries is currently in a comfortable financial risk profile and liquidity, following the successful Rs. 2,000 crores equity infusion through QIP route in July 2020.

In the same period operating profit and net profits have grown at a rate of 39% and 48% respectively. The company’s focus on R&D and agri technology makes it very interesting. India Pesticides is to the off-patent agro chemical sector what Dr Reddy’s and Cipla are to Indian pharma generics. What bodes well for Dhanuka are its long standing tie ups with global innovators and strong R&D.

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Coromandel International Limited is engaged in the manufacturing and trading of farm inputs consisting of fertilizers, crop protection, speciality nutrients, and organic compost. The Company’s segments include Nutrient and other allied businesses and Crop Protection. For example, if a particular area experiences little rainfall, the yield affects the company’s sales. It is, therefore, necessary to invest in businesses whose revenues are unaffected by poor harvests.

Key risk includes significant moderation in revenue growth and operating profitability due to higher-than-normal time lag in passing on increased raw-material prices and delays in commissioning of projects or execution of orders. Consumer spending in India will return to growth in 2021 post the pandemic-led contraction, expanding by as much as 6.6%. The Indian food industry is poised for huge growth, increasing its contribution to world pepperstone broker review food trade every year due to its immense potential for value addition, particularly within the food processing industry. The Indian food processing industry accounts for 32% of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. Karuturi Global Limited is involved in agriculture, food processing, and information technology.

The below list shows the top 10 agrochemical stocks in India based on return on assets. The company is engaged in developing, processing, researching, and manufacturing products like castor, TradersWay Forex Broker sorghum, wheat, cotton, pearl millet, paddy maize, tomato, sunflower, etc. The company is a part of Camellia PLC UK, which is the largest private sector tea producer worldwide.

• With an increased proclivity towards tech and language, he aims to capitalise on his interests as a content writer at Finology.
• For centuries farmers and plant breeders have labored to improve crop plants.
• Regulations can include changes in allowable ingredients or chemicals to be used.

The blog posts/articles on our website are purely the author’s personal opinion. The content in these posts/articles is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a professional financial or tax advisor. As part of the focus on building healthcare infrastructure, there are certain expectations from the government. It is anticipated to raise spending on corporations to improve output, as well as tax relief for individuals buying health insurance, easier access to medical treatment and a generous push for drug research.

Owing to the changes and development in the sector, a lot of venture capital funding is flowing into the agriculture sector. Total VC funding in this sector crossed the US$ 3 bn mark, out of which US$ 1 bn came in the year 2021 alone. Basically, as the word suggests, agritech is a combination of agriculture and technology.

The Company’s long-term goal is to unlock the growth potential of Indian agriculture as a global producer and exporter of food, feed, and fiber. An Investor should cherry pick companies which have visibility in growth and have the ability to come out stronger from any downturns. Other factors such as profit margins, R&D expenditure, revenue growth rate etc. should definitely be checked for investing in an agricultural company. The below mentioned model portfolio includes a list of stable companies from the Agricultural industry for an investor to include in his portfolio.

With the introduction of electric vehicles in India, Hero is well placed to continue its domination in the market. As an investor, knowing which stocks to invest in can make or break your investments. Despite the initial economic setbacks due to the pandemic the Indian economy bounced back and the benchmark indices Nifty 50 and Sensex, both rose over 20% in 2021. All the sector-specific amana capital review indices ended 2021 in the green; metal and power indices each contributed more than 60%. India’s equity benchmark has fallen amid a recent global selloff sparked by fears about the Federal Reserve’s impending rate hikes and foreign funds exiting the market. Trade Brains is a Stock market analytics and education service platform in India with a mission to simplify stock market investing.