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Roll of dice for agrochem companies with El Nino dampener on monsoon

Adverse agronomical conditions, excess channel inventory weigh on domestic market volume offtake

Ram Prasad Sahu

Premium

Fertilizers

4 min read Last Updated : Feb 27 2023 | 6:55 AM IST

Domestic-focused agricultural chemical (agrochem) companies could face near-term headwinds, given the worries on the El Niño effect on monsoons, higher inventory, and pressure on margins. Some of these were reflected in the October-December quarter (third quarter, or Q3) results of companies and may impact them in the current quarter (fourth quarter, or Q4) as well.

Nuvama Research pointed out that the sector witnessed mixed performance during the quarter as global agrochem and domestic fertiliser companies maintained growth momentum, while adverse agronomical conditions and excess channel inventory weighed on domestic market volume offtake.

Dhanuka Agritech and Rallis, which generate a majority of revenue from the home-grown market, did not fare well in the quarter.