In this article, we look at two stocks, both from the fertilizer & agrochemical sector, recommended by the Trade Brains Portal to buy for an upside potential of more than 25%. We also analyzed the market’s performance yesterday to understand what may lie ahead for the stock indices in the coming days.
1. Chambal Fertilisers & Chemicals Ltd
- CMP: ₹ 540
- Target: ₹ 680
- Upside: 25.93%
- Time frame: 12 Months
Why it’s recommended:
Founded in 1985, Chambal Fertilizers and Chemicals Ltd. produces nearly 15% of India’s urea. As the primary fertilizer supplier in Rajasthan, Madhya Pradesh, Punjab, and Haryana, it supports farmers across eleven states in northern, eastern, central, and western India. With 22,000 village outlets, 2,200 dealers, and 15 regional offices.
The company has an extensive marketing network. Among private-sector urea manufacturers in India, it maintains the largest market share. Currently, it operates three advanced urea factories in Gadepan.
In FY25, Chambal reported revenues of Rs 16,646 crore, with a PAT of Rs 1,649 crore. Urea production reached 34.61 lakh metric tons, up from last year’s 33.83 lakh metric tons, while sales increased to 34.71 lakh metric tons, compared to 32.56 lakh metric tons the previous year.
The company aims to boost its phosphoric acid capacity from 5 lakh MT to 7 lakh MT by 2027. In FY26, the nitrogen, phosphorus, and potassium (NPK) portfolio is projected to grow 2.5 times.
The joint venture (IMACID—Morocco) generated 5.25 lakh MT and sold 4.35 lakh MT in FY25. For the Technical Ammonium Nitrate (TAN) initiative, the company allocated Rs 300 crore in FY25 and expects to invest Rs 1,200 crore in FY26.
The TAN project’s capacity is 2.4 lakh MT, with Rs 900 crore earmarked for total expenditure; Rs 650 crore has been used up in FY 25, leaving Rs 250 crore for FY 26. Furthermore, the company anticipates revenue in Q3/Q4 of FY26, with a commercialization date set for January 2026. The TAN project is set to achieve 80-90% capacity utilization.
The company plans to import 1.3 lakh MT of di- di-ammonium phosphate (DAP) and TSP during the upcoming Kharif season. The TAN project aligns with margin expectations. Strategic alliances, new product launches, and volume growth consistently bolster CPC-SN margins. Early stocking and competitive pricing give the company assurance for Kharif.
Risk Factor:
Chambal operates in a highly regulated sector. The government is decreasing subsidies without raising prices and has tightened energy consumption standards under the 2015 urea policy, with even stricter regulations anticipated by the end of fiscal 2025. These changes may affect Chambal’s operations and profitability.
2. Gujarat State Fertilizers & Chemicals Ltd
- CMP: ₹ 209
- Target: ₹ 265
- Upside: 26.79%
- Time frame: 12 Months
Why it’s recommended:
Established in 1962, Gujarat State Fertilizers & Chemicals Ltd. (“GSFC”) is India’s first joint sector industrial complex. It has developed into a major integrated producer of industrial chemicals and fertilizers, backed by a variety of product lines, robust internal research and development, and internationally recognized quality credentials under the Responsible Care and ISO frameworks.
The company’s two main business segments include fertilizer and industrial products. The industrial products category includes caprolactam, nylon-6, melamine, methanol, and more, whereas the fertilizer products segment includes urea, ammonium sulfate, and diammonium phosphate.
The company reported revenue of Rs 9,533.9 crores, growing by 4.14% in FY25 from Rs 9,154.6 crores in FY24. This growth was largely driven by the fertilizer segment, reflecting improved operating efficiency and better cost absorption.
The fertilizer segment saw a 7.3% YoY gain in sales income, from Rs 6,834.62 crore in FY24 to Rs 7,331.8 crore in FY25, with a 15.3% growth in gross sales volume. For the fertilizer segment, the management anticipates an EBITDA of Rs 3,000 per metric ton in FY26.
PBT increased by 7% YoY to Rs 756 crore, while PAT improved by 5% YoY to Rs 591 crore. Its Urea-II renovation project is already running at full capacity, and it recently commissioned a 15 MW solar power facility at Charanka Patan.
The Phosphoric Acid (PA) and Sulfuric Acid (SA) Project at Sikka is on track, with SA V’s commissioning expected to be finished in the first half of FY26. On the Capacity Expansion front, the business plans to spend approximately Rs 600 crore on urea, Rs 453 crore, and Rs 300 crore on SA V over the course of the next six months.
Aided by a positive monsoon forecast and prompt policy actions by the Department of Fertilizers, the firm is hopeful about Q1FY26 for its fertilizer segment. The government’s determination to ensure sufficient supply and stable prices before the Kharif season is reflected by the early announcement of updated Nutrient-Based Subsidy (NBS) rates, which include a roughly 25% increase in support for DAP (diammonium phosphate) and NPK (nitrogen, phosphorus, and potassium) fertilizers.
Risk Factor:
To remain profitable, the company must navigate regulatory hurdles and depend on government subsidies. Regulations surrounding fertilizers dictate prices and subsidies, significantly influencing the profitability of fertilizer manufacturers. The available subsidies and the timing of their receipt directly impact the liquidity of the fertilizer sector. As raw material costs have stabilized, the government is reducing subsidies, leading companies to seek more short-term loans.
Market Recap June 6th, 2025
The RBI’s move to cut the repo rate by 50 basis points to 5.50% and change its policy stance to neutral was the reason for today’s strong recovery in the Indian market. Both growth-oriented and consumption-linked industries saw improvements in investor confidence, with Infrastructure & Realty, NBCFs & Finance, and Metal all seeing gains.
The Nifty 50 gained 252.15 points, or 1.02%, during the day, opening above the 20-day EMA at 24,748.70, reaching a peak of , and closing at 25,003.05. The BSE Sensex, which opened at 81,434.24 and ended at 82,188.99, up 746.95 points, or 0.92%, also showed confidence.
Both indices went above all four 20/50/100/200 EMAs, with the Nifty 50 RSI at 59.98 and the BSE Sensex RSI at 59.27 (well below the overbought zone of 70), both EMAs and RSIs in the daily time frame. Following the policy decision, the Nifty Bank index closed at 56,578.40, up 1.47%, after hitting an all-time high of 56,695.
The largest gainer on the sectoral front was the Nifty Realty index, which crossed the 1,000 milestone after six months and closed at 1,039.60, up 46.50 points, or 4.68%. Real estate stocks like DLF Ltd. and Godrej Properties Ltd.
were the biggest beneficiaries, jumping above 6%. This follows after a significant rate drop that is anticipated to reduce property EMIs, which will directly benefit homeowners, especially those in low-income groups (LIG) and economically weaker sections (EWS).
The flexibility among lenders with better liquidity from the rate decrease is likely to create credit availability primarily for MSME loans and consumer lending, which is why the Nifty Private Bank index also remained the top gainer by 1.79%, or 490.10 points, closing at 27,832.50. Private banks like Axis Bank increased by 3.07%, RBL Bank gained 5.19%, Bandhan Bank increased by 4.01%, and IDFC First Bank jumped by 7.11%, or 4.75 points.
The Nifty metal index also increased by 1.9%; major stocks like NALCO and Jindal Stainless Ltd increased by more than 3% each, and JSW Steel continued to be the biggest gainer, up 3.73%, among the top sectoral performers.
The Nifty Finance index grew by 1.75%, with ICICI Lombard leading with a 6.85% increase, followed by Muthoot Finance with a 6.61% gain and Shriram Finance with a 5.65% increase.
The Nifty media index was the only loser, falling -1.14%, or -19.65 points, to close at 1,705.75. The laggards were Tips Music, which dropped -2.75%; Dish TV India; and PVR Inox, which fell -2.08% and 1.85%, respectively.
Asian markets saw a mixed response across the Asia-Pacific region today, remaining on a neutral tone. In contrast to the Hang Seng Index, which slid -0.48% or -114.43 points to close at 23,792.54, and the Shenzhen Index, which fell -0.19%, the Shanghai Stock Exchange was up 0.04%, and the Nikkei 225 Index was up 0.5%. The Dow Jones Futures increased 142 points, or 0.34%, on the US markets.
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