<dhhead-MANAGEMENT DISCUSSION AND ANALYSIS</dhhead-
1. Economic Environment
1.1. Global Economic Outlook
The global economy has, to date, withstood a series of shocks, yet another one—this time a military conflict engulfing the Middle East since the end of February— is testing this resilience. This is the latest culmination in a series of events that have been reshaping international relations and raising geopolitical tensions markedly across all regions in recent years (Figure 1.1).
The conflict has already inflicted humanitarian costs, damaged critical infrastructure, and severely disrupted maritime and air traffic in the affected region. Economies around the world face repercussions through the direct impact of higher commodity prices, indirect second-order effects on inflation expectations—which tend to be especially sensitive to energy and food prices—and amplification effects coming from risk-off sentiment in financial markets. Commodity-importing emerging market and developing economies are at risk of being hit harder, with a depreciation of their currencies exacerbating the impact of higher energy and food prices. The global economic impact will crucially depend on the conflicts duration, intensity, and scope, which are inherently unpredictable. This latest shock comes less than a year since the shift in US trade policies, and the transition to a new
international trade system is still ongoing. Following recent court rulings and executive actions, the overall US effective statutory tariff rate is about 5.3 percentage points below the level assumed in the October 2025 World Economic Outlook (WEO) (Figure 1.2), and changes in the cases of a few countries are more substantial.
The current environment has incentivized a growing number of countries to finalize long-standing trade negotiations or start new partnerships to foster economic ties among themselves, such as the one between the European Union (EU) and MERCOSUR (the Southern Common Market).
Amid these developments, uncertainty, although lower than the peaks it reached in 2025, is still historically high (Figure 1.3). Several inflection points in the coming months may trigger spikes. First and foremost, the situation in the Middle East remains fluid. Odds of a range of outcomes—from ceasefire to serious escalation of hostilities—shift by the day. On the trade front, an extension, beyond their initial 150 days, of the Section 122 tariffs recently enacted by the US administration requires congressional approval, or similar tariffs would need to be imposed using other legal authorities. The United States-Mexico-Canada Agreement (USMCA) is set for a mandatory joint review at about the same time the extension comes due, in July 2026. Many of the US agreements with other
trading partners so far provide only temporary relief and are set to expire by the end oRs. 2026. The global economy is facing this next test of resilience as signs of unevenness lie beneath the surface. Activity in the two largest economies, China and the United States, has been stronger than was expected in the October 2025 WEO. But this strength has been uneven.
In the case of China, domestic activity— especially in the housing sector—lags behind exports. In the case of the United States, strong activity has been accompanied by low employment growth, amid declining labor force growth. The unevenness raises downside risks to the outlook, adding to the risks posed by intensifying geopolitical tensions. Medium-term growth prospects remain lackluster, weighed down by geo-economics fragmentation and structural challenges. That said, it may very well be that current tailwinds, including those from continued fiscal policy support, will last long enough to carry the global economy through the disruptions from the war and to a higher growth path paved by productivity gains from artificial intelligence (AI). Even if they do, however, it will still be crucial to have the right policies in place to make sure that technological transformation leads to broadly balanced growth within and across countries.
Before the war, the global economy was performing better than expected, laying the groundwork for upward revisions to forecasts. In aggregate, global growth in the fourth quarter oRs. 2025 increased to 3.9 percent on an annualized basis. In China, sequential growth accelerated (per IMF staff
seasonal adjustment) to 6.1 percent as strong exports offset weak domestic demand. An increase in fiscal spending fueled stronger activity in Germany, helping growth in the euro area, excluding Ireland, accelerate to 1.5 percent. Growth in the United States slowed to 0.5 percent, lower than expected in the January 2026 WEO Update, as the government shutdown temporarily led to a sharp contraction in public expenditure. Expansion in US technology-related spending remained strong in the fourth quarter, but its effect on GDP was offset by its high import share. Growth in Japan rebounded to 1.3 percent owing to stronger consumption and investment.
(Source: IMF)
1.2. Indian Economic Outlook
Despite heightened global uncertainties, the Indian economy remained strong on the back of steady private consumption and robust investment on the demand side, and buoyant services alongside improving industrial activity on the supply side. Headline inflation moderated further during 202526 on account of sharp contraction in food prices supported by robust agricultural production and softened global commodity prices. However, core inflation faced upward pressures driven by precious metals. Indian financial markets demonstrated resilience, with money market rates evolving in line with the policy repo rate and prevailing liquidity conditions. Equity markets witnessed bi-directional movements in 2025-26, as supportive monetary and fiscal policy measures improved sentiment while negative global cues from geopolitical and tariff uncertainties, and artificial intelligence related concerns weighed on risk appetite. During 2025-26, the central government continued its fiscal consolidation and emphasis on capital expenditure, even as its total expenditure was contained within the budgeted target. States also prioritised capital expenditure while containing revenue expenditure, thereby improving the quality of expenditure. A modest current account deficit and adequate forex reserves imparted resilience to the external sector amid subdued capital flows during the year.
The Indian economy remained on a strong and steady growth path, notwithstanding the heightened external shocks in 2025-26, particularly following the imposition of higher US tariffs in April 2025. India continued to be the fastest growing large economy, supported by robust
macroeconomic fundamentals and proactive policy measures. Economic activity was bolstered by steady growth in consumption and investment on the demand side, and a buoyant services sector and improvement in industrial activity on the supply side. Aggregate Demand II.2.2 Aggregate demand - measured by gross domestic product (GDP) at constant prices - grew by 7.6 per cent in 2025-26 from 7.1 per cent a year ago (Table II.2.1 and Appendix Table 1).
Table 11.2.1. Real GDP Growth (%)
| Component | 2023-24 | 2024-25 | 2025-26 |
| 1 | 2 | 3 | 4 |
| I. Total Consumption | |||
| Expenditure | 4.9 | 5.9 | 7.5 |
| Private | 5.B | 5.8 | 7.7 |
| Government | 0.6 | 6.5 | 6.6 |
| II. Gross Capital Formation | 8.7 | 6.1 | 6.5 |
| Gross Fixed Capital Formation | 7.3 | 6.4 | 7.1 |
| Change in Stocks | 116.9 | 1.7 | 10.4 |
| Valuables | -9.3 | 1.9 | -15.8 |
| III. Net Exports | |||
| Exports | 0.7 | 6.6 | 6.5 |
| Imports | -1.0 | 5.3 | 6.4 |
| IV. GDP | 7.2 | 7.1 | 7.6 |
Growth in GDP was anchored by domestic drivers - private final consumption expenditure and fixed investment (Chart II.2.1 and Appendix Table 2). II.2.3 The imposition of steep tariffs by the US on its trading partners initially raised concerns about a possible drag on the external sector and overall GDP growth. However, the adverse spillovers remained contained, with net exports exerting only a marginal drag oRs. 0.1 percentage points in 202526.
Consumption
During 2025-26, private final consumption expenditure - the mainstay of aggregate demand - grew by 7.7 per cent, strengthening from 5.8 per cent a year ago. The growth momentum was buoyed by steady rural consumption and improvement in urban demand, which may be partly attributable to the income tax cuts and goods and services tax (GST) rationalisation.5 Government final consumption expenditure remained steady at 6.6 per cent.
Investment and Saving II.2.5 The gross domestic investment rate, measured by the ratio of gross capital formation (GCF) to GDP at current prices, remained broadly stable at 34.3 per cent in 202425.6 Gross fixed capital formation - a primary component of GCF - expanded at a robust pace oRs. 7.1 per cent in 2025-26 (6.4 per cent a year ago), as reflected in the sustained performance of its key coincident indicators (Chart II.2.2). Government-led capital expenditure continued to play a countercyclical role, helping to crowd in private investment.
Indias sovereign credit rating upgrade in August 2025 further reinforced investor confidence. Corporate earnings also improved during the year.
While corporate sales growth was subdued at the start oRs. 2025-26, it picked up by Q3 amid strengthening demand. II.2.6 Gross domestic savings rose to 34.2 per cent of gross national disposable income (GNDI) in 2024-25 from 32.3 per cent in 2023-24. The net household financial saving increased to 7.0 per cent of GNDI in 2024-25 from 5.8 per cent a year earlier, as the decline in household financial liabilities more than offset the
moderation in gross financial saving (Appendix Table 3). Gross household financial saving moderated to 11.8 per cent of GNDI in 2024-25 from 12.1 per cent in 2023-24, while household financial liabilities fell sharply to 4.8 per cent of GNDI in 2024-25 from 6.4 per cent in the previous year. Instrument wise, household financial saving is dominated by deposits, followed by provident and pension funds, insurance, with a gradual increase in investment in shares and debentures (Table II.2.2). The saving-investment gap narrowed during 202425, with the household sector remaining the
primary net supplier of funds with its surplus funds rising to 7.8 per cent of GDP in 2024- 25 from 6.4
per cent in 2023-24 (Chart II.2.3). The resource gap of private corporations narrowed amid higher savings and lower investment, while fiscal consolidation reduced general government dissaving to 4.6 per cent of GDP from 5.3 per cent of GDP in the preceding year. The narrowing of the savings-investment gap at the economy-wide level indicates a reduced dependence on external capital and vulnerability to external shocks.
Table 11.2.2: Financial Saving of Household Sector
| Item | 2015-16 | 2016-17 | 201718 | 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23 | 2023-24 | 2024-25 |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 6 | 9 | 10 | 11 |
| A. Gross Financial Saving | 10.7 | 10.4 | 1113 | 11.8 | 11.4 | 15.2 | 10.9 | 11.2: | 12.1 | 11.8 |
| of which: | ||||||||||
| 1. Currency | 1.4 | -2.1 | 2.6 | 11.4 | 1.4 | 1.9 | 1.1 | - | - | |
| 2. Deposits | 4.6 | 6.3 | 3.0 | 4.2 | 4.3 | 6.2 | 3.5 | - | - | |
| 3. Shares and Debentures | 0.2 | 1.1 | 1.0 | 0.9 | 0.5 | 0.5 | 0.9 | - | - | |
| 4. Claims on Government | 0.5 | 0.7 | 0.3 | 1.1 | 1.3 | 1.3 | 1.1 | - | - | |
| 5. Insurance Funds | 19 | 2.3 | 2.0 | 2.0 | 1.7 | 2.8 | 2.0 | - | - | |
| 6. Provident and Pension Funds | 2.1 | 2.1 | 2.1 | 2.1 | 2.2 | 2.5 | 2.3 | - | - | |
| 3. Financial Liabilities | 2.7 | 3.0 | 4.6 | 4.0 | 3.3 | 3.7 | 3.8 | 6.0 | 6.4 | 4.3 |
| C. Met Financial Saving (A-Bi | 7.9 | 7.3 | 7.5 | 7.8 | 7.6 | 11.6 | 7.2 | 5.2 | 5.B | 7.0 |
2. Agriculture and Fertilizer Industry
2.1. Global Agriculture Outlook
Prices of several agricultural commodities have increased in recent weeks, mainly reflecting the effects of the war in the Middle East through higher energy costs. Thus far, the effects of the conflict on food commodity markets have been more limited than at the start of Russias invasion of Ukraine in 2022, when disruptions to major exporters of grains and oilseeds triggered an immediate surge in food prices. With the baseline assumption that supply disruptions in the Middle East ease around the middle of the year, food commodity prices are forecast to increase by 2 percent in 2026 and 1 percent in 2027—a 3 percentage point upward revision for both years from the January 2026 forecast—with larger revisions for oils and meals as higher crude oil prices strengthen demand for biofuel feedstocks. Yet, higher transportation costs
from elevated crude oil prices and lower yields due to reduced fertilizer application could raise domestic food inflation and exacerbate food insecurity, especially in vulnerable settings. The World Bank Groups overall agriculture commodity price index is forecast to fall by 6 percent in 2026 (y/y), with declines in beverage prices outweighing rises in food prices. Raw material prices are expected to be broadly unchanged. In 2027, agricultural commodity prices are projected to stabilize as the beverage price correction runs its course and a small decline in raw material prices is offset by gains in food prices. A longer or more intense than expected conflict in the Middle East, or the materialization of extreme weather events, could push food prices higher than projected.
Food commodities
Recent developments
Food commodity prices rose by about 3 percent (m/m) in March, after the near-total closure of the Strait of Hormuz, bringing food prices to a 22- month high in March. The increase in food prices during the first month of the war in the Middle East was less severe than the 11 percent increase in March 2022, one month after Russias invasion of Ukraine—despite much larger energy and fertilizer price spikes in the new conflict (figures 12.A and 12.B). Oils and meals have experienced the largest price increase among food groups during the new conflict, by 6 percent in March 2026 (m/m), due to higher demand for biofuel feedstocks. The more muted food price response relative to 2022 reflects that Russias invasion of Ukraine directly disrupted major exporters of grains and oilseeds, triggering immediate price spikes, whereas the new conflict is affecting food markets indirectly, mainly through higher energy and fertilizer costs. Overall, the World Bank Groups food price index rose by 5 percent in 2026Q1 (q/q) but changed little from a year earlier, with broad-based gains across all its three main components (figures 12.C and 12.D).
Despite ample global supplies, grain prices rose by 5 percent in 2026Q1 (q/q) to a level 4 percent lower than a year earlier, driven by weather-related risks, firm global demand, and rising energy and fertilizer costs owing to supply disruptions triggered by the war. Wheat prices were supported by weather concerns over winter crop conditions in parts of the Northern Hemisphere and expectations of reduced spring planting in response to higher fertilizer prices, resulting in a 9 percent increase in the quarter. Maize prices climbed to their highest level in a year, supported by robust demand from the ethanol industry and supply constraints stemming from logistical disruptions in the United States (icy conditions on some waterways) and conflict-related disruptions in Ukraine. Rice prices also edged up, reflecting strong export demand and firm domestic consumption in major exporting countries. In the first half of April, grain prices broadly held their gains amid uncertainty surrounding peace negotiations in the Middle East.
The oils and meals price index strengthened in March to its highest level in over two years, reflecting elevated crude oil prices that increased the attractiveness of biofuels, as well as higher biofuel mandates introduced in countries including Indonesia, Thailand, and the United States. The same factors continued to buoy prices into April. In 2026Q1, the index rose by 5 percent (q/q), to a level
FIGURE 12 Agricultural prices
One month into the war in the Middle East, food prices rose 3 percent in March—below the 11 percent jump after Russias invasion of Ukraine, despite larger energy and fertilizer price spikes during the new conflict. Food prices rose across all three main categohes during the quarter, with all three major grains firming. Vegetable oil prices also increased, supported by tighter supplies and robust demand for biofuels against a backdrop of rising energy costs. So far. grain futures prices reflect limited reactions to the con fSet.
7 percent higher than a year earlier. Soybean prices rose by 5 percent (q/q), supported by higher vegetable oil prices and expectations of renewed Chinese buying (figure 12.E.). Following a thaw in U.S.-China soybean trade, China met its commitment to purchase about 12 million tons of soybeans from the United States in the 2025-26 marketing year and is expected to buy more, partly to support higher pork production. Soybean price gains have been dampened, however, by the seasonal arrival of supplies from South America. Soybean oil prices increased by 16 percent in 2026Q1 (q/q) and 25 percent (y/y) as stronger domestic use in major exporters tightened export availability and as markets reacted to ambitious U.S. biofuel targets announced in late March. Palm oil prices also firmed, bolstered by higher crude oil prices that increased biodiesel demand.
The other foods price index—about three-fourths of which is accounted for by sugar and meat—rose by 5 percent in 2026Q1 (q/q), with increases in beef prices outweighing declines in sugar prices. The U.S. benchmark for beef prices increased by 11 percent (q/q) and 22 percent (y/y) amid reduced cattle supplies and strong demand. Meanwhile, sugar prices fell by 2 percent (q/q) and 22 percent (y/y) on expectations of large surpluses in the 2025-26 season in Brazil and India, the worlds two largest producers.
Outlook
The World Bank Groups food price index is projected to edge up by 2 percent in 2026 and 1 percent in 2027 (y/y) (table 1). This represents an upward revision oRs. 3 percentage points for both years relative to January 2026 projections. The war is affecting food prices mainly through higher energy and fertilizer costs, though some spring season fertilizer purchases were secured before the conflict. Under the baseline assumption that supply disruptions in the Middle East ease by mid-year, the effect of the war on food commodity prices in 2026 and 2027 is expected to be smaller than during the early stages of Russias invasion of Ukraine. Futures prices also reflect limited reactions to the conflict in the Middle East so far (figure 12.F).
Grain prices are projected to rise by 2 percent in both 2026 and 2027, driven mainly by higher wheat and maize prices. Global wheat and maize production are expected to edge down in 2026-27, after supplies improved and stocks-to-use ratios rose in 2025-26 (figures 13.A-13.C). As a result, wheat and maize prices are both forecast to increase by 4 percent in 2026, followed by additional gains oRs. 3 percent for wheat and 1 percent for maize in 2027. The wheat price forecast for 2026 is slightly below the mid-March 6 percent consensus increase, while the maize forecast is above the consensus expectation of little change. For 2027, the wheat forecast is modestly below the 5 percent consensus increase, while the maize forecast is broadly in line with consensus. The outlook for wheat takes into account adverse weather and logistical disruptions in major exporters early this year, alongside an expected decline oRs. 2 percent in global wheat production in 2026-27—albeit from record levels—due to declines in both harvested area and yields.
For maize, record-high production in 2025-26 is being accompanied by sustained demand for
Global grain supply is forecast to increase in 2025-26 by more than the historical average. Stocks-to-use ratios are expected to decline somewhat tor maize and rice but improve slightly for wheat. In 2026-27. wheat and maize production are expected to contract as acreages decline, while soybean area and output are projected to increase. Edible oil supply growth is set to continue, with stocks-to-use ratios improving tor soybeans and soybean meal but tightening slightly for soybean oil.
biofuels and animal feed. In 2026-27, maize acreage is expected to contract in major exporting countries—including the United States—due to crop-rotation requirements and higher fertilizer costs, supporting a further firming of prices in 2027 (figure 13.D). Rice prices are forecast to decline by 2 percent in 2026 on ample supplies before rising by 3 percent in 2027, as low prices curb acreage gains in major exporters.
The oils and meals price index is expected to increase by 4 percent in 2026, before stabilizing in 2027. Export supplies of edible oils are expected to be constrained in 2026 by higher domestic use of soybean oil and palm oil for biodiesel in major exporting countries, in part due to conflict-related oil supply disruptions in the Middle East. However, continued growth in edible oil production and
comfortable stock-to-use ratios are likely to curb price increases (figures 13.E and 13.F). Thus, both soybean oil and palm oil prices are forecast to rise by 8 percent in 2026 and remain steady in 2027.
Strong soybean oil demand is projected to lift soybean prices by 6 percent in 2026. Thereafter, a rebound in harvested area in the 2026-27 season is anticipated to limit a further price increase in 2027 to 1 percent. Soybean meal prices are forecast to decline by 2 percent in 2026, reflecting record production in the 2025-26 season driven by higher soybean oil production, before edging up in 2027.
Rising vegetable oil prices and softening oil meal prices (co-products of vegetable oil production) in 2026 are expected to shift demand from soybeans toward alternatives that yield larger amounts of oil—such as sunflower and rapeseed—reducing reliance on soybean oil and tightening soybean meal supply in 2027.
The index of other foods prices is projected to be broadly stable in 2026 before rising by 2 percent in 2027. Beef prices are projected to increase by 11 percent in 2026 amid strong demand and tight cattle supplies and are expected to rise by a further 3 percent in 2027. At the index level, the increase in beef prices in 2026 is projected to be largely offset by a 6 percent decline in sugar prices as favourable growing conditions in major producing countries boost global exports by about 4 percent in the 2025-26 season. Sugar prices are forecast to fall by a further 3 percent in 2027.
(Source: World Bank - Commodity Markets Outlook, April2026)
2.2. Global Fertilizers Outlook
The World Bank Groups fertilizer price index rose by more than 12 percent in 2026Q1 (q/q), marking the sixth increase over the past seven quarters. On a monthly basis, prices in March 2026 reached their highest level since 2022. The recent surge in the index largely reflects the impact on exports of fertilizers and inputs from the closure of the Strait of Hormuz. Price increases have been most pronounced for urea, with more moderate gains for other fertilizer types. The index is projected to increase by more than 30 percent in 2026, supported by higher input costs—particularly for nitrogen- and phosphate-based fertilizers— and resilient demand. The increase, however, remains well below the sharp spikes oRs. 2021 and 2022 of over 100 and 55 percent, respectively, which were
driven by export disruptions in Russia and Belarus alongside elevated input costs—particularly for natural gas in Europe and Asian LNG. Prices are expected to ease in 2027 as exports recover and additional global supplies come online. Nonetheless, risks to the price outlook remain tilted to the upside, including the possibility of higher- than-expected energy prices and further production and trade disruptions associated with prolonged constraints on shipping through the Strait of Hormuz, as well as undetermined damage to production and export facilities of all related materials.
Nitrogen (urea) prices averaged $725 per metric ton ($/mt) in March, an increase of nearly 55 percent from February and the highest level since April 2022 (figure 18.A). The surge reflects a near halt in exports from the Middle East region following the closure of the Strait of Hormuz, a critical shipping route for nitrogen-based fertilizers produced in the region. In 2024, the region accounted for almost one quarter of global exports of urea—the most widely used nitrogen fertilizer—and more than 15 percent of global ammonia exports (a key input into the production of urea), according to data from the International Fertilizer Association (database).
In addition to shipping disruptions, production outages have further constrained supply. The Islamic Republic of Iran has ceased ammonia production due to the conflict, while Qatar has suspended production of urea, ammonia, and sulfur following damage to its production facilities, leading to price increases in some of these inputs (figure 18.B). Production of urea and ammonia has been reduced in India (also the largest importer of both) because of declines in LNG supply. Further production curtailments and demand destruction are likely, which would negatively impact crop yields with a lag in some locations. On the policy front, there are reports that China (the worlds largest producer and second largest exporter of nitrogen- based fertilizers), may curb exports starting in the second quarter to prevent domestic fertilizer prices from rising. Indeed, fertilizer exports from China during the first two months of the past three years (including 2026) have been roughly one-fifth of the levels observed over the preceding three-year period (figure 18.C). Markedly high urea prices have pushed the ratio of urea to food prices, a rough measure of fertilizer affordability, to levels not seen since mid-2022, implying tighter margins for farmers (figure 18.D).
Urea prices are projected to rise by nearly 60 percent in 2026 (y/y), with market conditions expected to remain tight for much of this year before declining by about 25 percent in 2027 as exports from the Middle East recover and natural gas prices moderate. Some modest increase in production capacity in Europe is also anticipated, following disruptions caused by the 2022 surge in natural gas prices. Key upside risks include a longer- than-assumed phase of acute shipping constraints in the Middle East or a re-escalation of conflict, which could result in deepening shortages. Furthermore, concerns about domestic fertilizer availability could induce trade restrictions by major exporters, while higher-than-expected natural gas prices could further push up input costs (natural gas accounts for 80-90 percent of production costs for ammonia, the primary urea feedstock). If such risks materialize, average urea prices in 2026 could exceed the 2022 average of $700/mt—the second- highest level in real terms after 1974.
DAP (diammonium phosphate) prices rose moderately in March but declined nearly 9 percent on average in the quarter, but were 6 percent above its level a year earlier. Their relative stability partly reflects the easing of Chinas phosphate export restrictions, with exports rebounding in the second half oRs. 2025 after a roughly 10 percent decline earlier in the year. The ratio of DAP to food prices has declined modestly, rendering DAP more affordable than a year earlier. DAP prices are projected to increase by nearly 6 percent in 2026 and decline by 10 percent in 2027 as new capacity comes online. The forecasts, however, are subject to two key risks that could push prices much higher. First, renewed export restrictions by China. Second, a prolonged closure of the Strait of Hormuz could significantly disrupt global fertilizer trade. Nearly 15 percent of global DAP exports go through the Strait, as does about one-third of global trade in sulfur and around 15 percent of trade in ammonia, both critical inputs for DAP production (figure 18.E). Nearly half of DAP and sulfur global production is internationally traded (figure 18.F). Producer OCP in Morocco has brought forward maintenance on phosphate production that will reduce 20262Q output, likely because of disruptions to sulfur and ammonia.
MOP (muriate of potash, or potassium chloride)
prices rose by more than 5 percent in 2026Q1 (q/q) bringing them to nearly 17 percent above their level a year earlier. Affordability of MOP relative to food
Fertilizer prices rose in 2026Q1 driven mostly by urea, for which the affordability index markedly deteriorated. Increased fertilizer prices reflect supply disruptions and higher input costs due to the conftct in the Middle East, along with trade restrictions The fertilizer index is projected to increase by more than 30 percent in 2026, but there are still risks of higher prices related to surging input costs and the potential for protracted disruptions to exports of fertilizers and crucial inputs from the Middle East.
has remained close to pre-2020 levels over the past five quarters. Overall, the global potash market remains well-supplied. Exports from Belarus have been rising following the easing of U.S. sanctions. Although EU sanctions continue to restrict shipments through Lithuania, alternative trade routes for Belarusian and Russian exports, together with higher exports from Canada and the Lao Peoples Democratic Republic, are expected to sustain ample supply this year and next. MOP prices are expected to rise by about 12 percent in 2026, before declining by 6 percent in 2027. In the longer term, the introduction of significant new production capacity, particularly in Canada (the worlds largest potash producer and exporter), could exert further downward pressure on prices. Overall, risks to the
price outlook appear broadly balanced, as MOP production and exports are not heavily dependent on the Middle East.
(Source: World Bank - Commodity Markets Outlook, April2026)
2.3. Indian Agriculture Outlook
Agriculture is one of the cornerstones of Indias economy and society, providing a livelihood to nearly 55% of the population. With the worlds second-largest agricultural land area, India is a global leader in farm output. The country has the largest cattle herd (buffaloes), the largest area under wheat, rice, and cotton, and ranks as the worlds top producer of pulses, and spices. India has held the top position in milk production since 1998, currently accounting for 25% of global output. Over the past decade, milk production has risen by 63.56%, from 146.3 million tonnes in 2014-15 to 239.2 million tonnes in 2023-24, achieving an average annual growth rate oRs. 5.7%. It is also the second-largest producer of fruits, vegetables, tea, farmed fish, cotton, sugarcane, wheat, and rice, underscoring its central role in global food supply. Indias agrochemical exports have nearly trebled in the past decade, rising to US$ 3.3 billion in FY25 from US$ 1.3 billion in FY15, making the country the third-largest exporter after China and the United States, according to a report by the Agro-Chemicals Federation of India (ACFI) and Deloitte.
The food industry in India is poised for rapid growth, driven by its immense potential for value addition. The food processing industry alone accounts for 32% of the countrys total food market and ranks fifth globally in terms of production, consumption, exports, and growth potential. Beyond generating employment for millions of farmers, the sector plays a vital role in rural industrialization, supply chain development, and food security.
Indias agricultural output has expanded significantly in the past decade, recording 40% growth and achieving surplus capacity for exports. In FY25, the sector grew by 5.4% year-on-year, supported by record production and higher trade volumes. Agricultural exports touched an all-time high of Rs. 4,50,839.85 crore (US$ 53.24 billion) in FY25, up from Rs. 4,11,772.66 crore (US$ 49.69 billion) in FY24. At current prices, agriculture and allied sectors account for 18% of Indias GDP (2024-
25), reaffirming the sectors importance to the national economy.
Production levels continue to rise steadily. According to the Third Advance Estimates Indias food grain production for 2024-25 is estimated at a record 3,577.32 LMT, up by 3,322.98 LMT from 2023-24, marking a 7.65% increase. Rice production alone is expected to reach 1,501.84 LMT in 2024-25, an increase oRs. 123.59 LMT YoY. Horticulture output has also shown remarkable growth, climbing from 280.70 million tonnes in 2013-14 to 369.06 million tonnes in 2024-25.
The exports for principal commodities in FY25 were the following:
- Marine Product: US$ 7.41 billion
- Basmati and Non-Basmati Rice: US$ 12.47 billion
- Spices: US$ 4.34 billion
- Buffalo Meat: US$ 4.06 billion
- Sugar: US$ 2.16 billion
- Miscellaneous processed items: US$ 2.04 billion
- Oil Meal: US$ 1.34 billion
Indias exports of agricultural and processed food products rose by 9.49% YoY to Rs. 4,50,839.85 crore (US$ 53.24 billion) in FY25. This growth was driven by strong shipments of rice, meat, and fruits. Looking ahead, rice exporters expect sustained demand from West Asia, even as the sector navigates tariff-related challenges in the US.
As on September 26, 2025, the area sown under Kharif crops is 112.07 million hectares as compared to 111.37 million hectares during the corresponding period of last year. In 2024-25, India exported 20.19
million tonnes of rice worth Rs. 1,05,720.04 crore (US$ 12.47 billion) to more than 172 countries.
Indias wheat stocks highest in three years as of March 2025. The Food Corporation of India aims to purchase 31 million tons of wheat in 2025. Rice reserves are also high, potentially boosting exports.
India shipped 16,98,170 metric tonnes of seafood worth Rs. 62,408 crore (US$ 7.45 billion) in FY25, with frozen shrimp remaining the leading export by volume and value. EU-bound exports reached 2,15,080 metric tonnes worth Rs. 9,430 crore (US$ 1,125.6 million), led by shrimp, cuttlefish, and squid in frozen form.
Foreign investment has also supported growth in the sector. From April 2000-June 2025, India received Rs. 22,071.9 crore (US$ 3.48 billion) in FDI inflows into the agriculture services sector. Additionally, the agricultural machinery sector attracted Rs. 12,298.5 crore (US$ 1.74 billion) in FDI inflows during the same period. The Indian food processing industry has cumulatively attracted a Foreign Direct Investment (FDI) equity inflow of about Rs. 89,918.6 crore (US$ 13.49 billion) between April 2000-June 2025.
During FY25, processed vegetables accounted for export of Rs. 7,223.85 crore (US$ 853.89 million), miscellaneous processed items accounted for Rs. 17,236.94 crore (US$ 2,038.16 million) and processed fruits & juices accounted for Rs. 8,515.23 crore (US$ 1,005.24 million). This growth is supported by rising incomes in both rural and urban areas, as well as rapid population expansion that continues to fuel demand for diverse agricultural and processed products.
The sector is also witnessing increasing adoption of modern technologies. Tools such as blockchain, artificial intelligence (AI), geographic information systems (GIS), drones, and remote sensing are being leveraged to enhance efficiency and transparency. Alongside, various e-farming applications are enabling farmers and agribusinesses to improve productivity and market access.
Investment
Some major investments and developments in agriculture are as follows:
• The Government of India has substantially increased its budget allocations for the sector, from Rs. 11,915.22 crore (US$ 2.60 billion) in 2008-09 to Rs. 1,62,671 crore (US$ 18.49 billion) in budget 2026, underscoring its strong commitment.
• The Indian Council of Agricultural Research (ICAR) has entered into a landmark Memorandum of Understanding (MoU) with the National Dairy Development Board (NDDB). This collaboration seeks to harness ICARs scientific expertise alongside NDDBs extensive grassroots experience to foster innovation, capacity building, and sustainable development throughout the dairy value chain.
• As of June 30, 2025, India has 8,815 cold storages with a combined capacity oRs. 402.18 lakh metric tonnes (MT).
• Indias push to become a global hub of natural and organic farming involves extensive farm management services including digital monitoring via Kisan Credit Card benefits and GST reductions on bio-fertilizers.
• The European Union (EU) has approved 102 additional fishery establishments for the export of Indias marine products, taking the total number of EU-approved Indian seafood export units to 604. This milestone is expected to strengthen Indias position in the European seafood market and mitigate the impact of US tariffs.
• The agriculture sector in India is poised to maintain a 4% growth over the next decade, driven by growing product demand, technological adoption, and supportive government measures, as expressed by NITI Aayog members.
• On September 11, 2025, a report highlighted how agritech startups in India are transforming farming by using smart technology like AI, IoT, satellite monitoring, and blockchain to boost productivity, reduce losses, and empower farmers.
• On November 16, 2025, EY published insights on the new agritech paradigm focusing on integration of technology-led innovation, policy enablement, and collaborative growth in Indias agricultural ecosystem.
• In Himachal Pradesh, Rs. 81 crore (US$ 9.13 million) water and irrigation projects were unveiled to irrigate over 50,000 kanal of farmland across 28 villages through an extensive pipeline and distribution network,
improving irrigation access at the grassroots level.
• Indias Free Trade Agreement with the UK signed on July 24, 2025, grants duty-free access to 95% of its agricultural and processed food exports, including marine products, and is expected to boost agri exports by over 20% in three years, supporting its US$ 100 billion target by 2030.
• India is redirecting record rice stocks towards ethanol production to support its 20% blending target, manage surplus supplies, and strengthen the role of agriculture in clean energy.
• In December 2023, NBCC signed an MoU with the National Cooperative Development Cooperation (NCDC) and NABARD for the construction of (1,469-grain storage units) the worlds largest grain storage plan in the cooperative sector.
• India to host the 27th WAIPA World Investment Conference in New Delhi from December 11-14, 2023.
• In December 2023, Tata-owned Rallis India launched NAYAZINC fertilizer.
• In October 2023, the President of India launched the Fourth Krishi Road map of Bihar.
• In October 2023, Coal India, partnered to invest Rs. 3,095 crore (US$ 371.69 million) in fertiliser JV to boost output.
• Government has set up a special fund called
the Food Processing Fund (FPF) of
approximately US$ 265 million in the National Bank for Agriculture and Rural Development (NABARD) for extending affordable credit to designated food parks and food processing enterprises in the designated food parks.
• Indians are spending more on processed food,
with beverages, refreshments, and processed items accounting for 9.84% of food
expenditure in rural areas and 11.09% in urban areas in 2023-24.
• The organic food segment in India is expected to grow at a CAGR oRs. 10% during 2015--25 and is estimated to reach Rs. 75,000 crore (US$ 9.1 billion) by 2025 from Rs. 2,700 crore (US$ 386.32 million) in 2015.
• The food processing industry supports over seven million jobs across the value chain, directly and indirectly, while enabling rural industrialization and reducing post-harvest losses. According to the Viksit Bharat@2047 report, Indias food processing sector will grow
significantly, reaching US$ 1.1 trillion by FY35, US$ 1.5 trillion by FY40, US$ 1.9 trillion by FY45, and US$ 2.15 trillion by FY47. The governments focus is on supply chain-related infrastructures like cold storage, abattoirs and food parks.
• Indias smart agriculture market reached US$ 860.7 million in 2025 and is projected to grow at a CAGR oRs. 18.93% to US$ 4,281.7 million by 2034, driven by rising demand for precision agriculture technologies. By 2025, Indian agritech companies are likely to witness investments worth US$ 30-35 billion.
• The performance of the agriculture and allied sector has been buoyant over the past several years, much of which is on account of the measures taken by the government to augment crop and livestock productivity, ensure certainty of returns to the farmers through price support, promote crop diversification, improve market infrastructure through the impetus provided for the setting up of farmer-producer organizations and promotion of investment in infrastructure facilities through the Agriculture Infrastructure Fund.
Government Initiatives
Some of the recent major Government initiatives in the sector are as follows:
• From 2014-15 to 2025-26, a total oRs. 25,689 Custom Hiring Centres (CHCs) have been established under the Sub-Mission on Agricultural Mechanisation (SMAM) scheme, including 558 CHCs during 2025-26 (as oRs. 30 October 2025).
• The Government has approved the allocation oRs. 52 lakh metric tonnes (LMT) of surplus rice from the Food Corporation of India (FCI) for ethanol production, 26 LMT each for the Ethanol Supply Year (ESY) 2024-25 (November 1,2024, to October 31,2025).
• The Pradhan Mantri Kisan Maandhan Yojana (PMKMY) provides pension schemes for farmers. Over 11 crore farmers have benefited from PM-KISAN, while 23.61 lakh farmers had enrolled in PMKMY as oRs. 31 October 2024.
• The Union Cabinet has approved the extension of the Animal Husbandry Infrastructure Development Fund (AHIDF), to be executed under the Infrastructure Development Fund
(IDF), with a total allocation of Rs. 29,610.25 crore (US$ 3.77 billion) over three years until 2025-26. In 2024, the AHIDF has generated significant impact by establishing an additional 141.04 lakh litres per day (LLPD) of milk processing capacity.
• The government has entered into agreements with 26 overseas and domestic companies at the World Food India summit, securing investments worth Rs 1.02 lakh crore (US$
11.80 billion) for Indias food processing sector.
• The National Programme for Organic Production (NPOP) is anticipated to support 2 million farmers, with organic exports projected to surpass US$ 1 billion by 2025-26.
• The Uttar Pradesh government is promoting farmers economic prosperity via procurement and direct payments. It is facilitating comprehensive support by establishing 4,645 procurement centres to enable paddy sales at the minimum support price.
• The Government has launched the Bharat VISTAAR AI initiative to empower Indian farmers. This artificial intelligence-based scheme offers a single-window platform delivering instant, technology-driven agricultural advisory services. Farmers can access real-time mandi prices, technical advice, and scheme integration through the system.
• The Government of India has detailed significant progress in revolutionising agriculture from field to farm via strategic infrastructure investments exceeding Rs. 1 lakh crore (US$ 11.37 billion) under the Agriculture Infrastructure Fund (AIF).
• The Government of India has allocated an outlay of Rs. 1,600 crore (US$ 185.04 million) for 2025-26 under the Pradhan Mantri Krishi Sinchayee Yojana. One of its key objectives is to enhance water delivery infrastructure from existing canals and other sources to designated clusters.
• A credit-linked subsidy scheme, alongside support for scaling up livestock enterprises (dairy, poultry, and small ruminants), to develop integrated value chains and livestock- focused Farmer Producer Organisations (FPOs). This forms part of a wider array of allied-sector initiatives outlined in the FY26-27 roadmap, with provisions incorporated into FY26 planning and budgeting.
• Between 31 October 2021 and 8 December 2025, the National Cooperative Development
Corporation NCDC disbursed a total of Rs 186.48 crore (US$ 21.57 million) in financial assistance to 19,938 dairy cooperatives across nine states.
• The Central government allocated Rs 12,200 crore (US$ 1.39 billion) towards Pradhan Mantri Fasal Bima Yojana (PMFBY) in the Union Budget 2026.
• As oRs. 22 July 2025, the Department of Fisheries has approved fisheries development projects worth Rs. 21,274.16 crore (US$ 2.46 billion) under the Pradhan Mantri Matsya Sampada Yojana.
• As of January 2025, over 25 crore soil health cards have been distributed to farmers across the country. By July last year, more than 93,000 farmer training programmes, over 6 lakh field demonstrations, and thousands of awareness campaigns were conducted under the scheme.
• As of September 2025, Rs. 73,155 crore (US$ 8.46 billion) has been sanctioned under the AIF for 1.27 lakh projects, encompassing thousands of warehouses and cold stores. The total project cost for these sanctioned initiatives amounts to Rs. 1.17 lakh crore (US$ 13.53 billion).
• The Agricultural and Processed Food Products Export Development Authority (APEDA) launched its new initiative BHARATI, Bharats Hub for Agritech, Resilience, Advancement and Incubation for Export Enablement, during the "Food & Beverages Sector Stakeholders Meeting".
• Prime Minister Mr. Narendra Modi highlighted Indias rapid transformation in the food processing sector, noting that it has expanded 20 times over the past decade, driven by Central government initiatives such as the Production-Linked Incentive (PLI) scheme and mega food parks. These measures have strengthened Indias role in global food security.
• The Government of India announced a significant reduction in GST on tractors, farm machinery, fertilizers, and other essential agricultural inputs. This GST cut also extends to allied sectors like dairy, aquaculture, and solar- powered equipment. The reform aims to lower cultivation costs, promote mechanization, and enhance rural livelihoods, making agriculture more competitive and sustainable.
• The Prime Minister Mr. Narendra Modi highlighted that under the Kisan Credit Card
(KCC) scheme alone, farmers have received assistance exceeding Rs. 10 lakh crore (US$ 112.78 billion) this year. The scheme has also been extended to livestock and fisheries sectors, benefiting those engaged in these allied activities extensively. Reduction in GST on bio-fertilizers further aided farmers.
• Prime Minister Mr. Narendra Modi highlighted Indias openness to global investment in food processing, citing the neo-middle class as a key driver of food trends and consumption. Further, GST reforms favour the sector by reducing taxes on most processed food items and biodegradable packaging, supporting healthier and sustainable product markets.
• In July 2025, The Coastal States Fisheries Meet 2025 under PM Matsya Sampada Yojana allocated Rs. 255 crore (US$ 29.1 million) for infrastructure and Rs. 364 crore (US$ 41.6 million) to equip 1,00,000 vessels with transponders, while launching Regional Fisheries Management Councils and the Marine Fisheries Census 2025 to enhance safety and governance.
• The Union Cabinet approved the Prime Minister Dhan-Dhaanya Krishi Yojana (PMDDKY) worth Rs. 24,000 crore (US$ 2.79 billion) from FY26 to boost farm productivity, irrigation, credit access, and post-harvest infrastructure for 1.7 crore farmers across 100 districts.
• The Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) is strengthening Indias food processing sector, benefiting 34.15 lakh farmers and creating over 4.33 lakh jobs through 1,601 projects.
• The government has approved an Action Plan for constructing steel silos under a Public- Private Partnership (PPP) model to modernize storage facilities, with a total capacity oRs. 24.25 Lakh metric tonnes (LMT) under development.
• The budget for Department of Agriculture and Farmers Welfare increased from Rs. 21,933.50 crore (US$ 2.53 billion) in 2013-14 to Rs. 1,27,290.16 crore (US$ 14.89 billion) in 202526, reflecting the governments commitment to agricultural development.
• In the Union Budget 2024-25, a provision of Rs. 1.52 lakh crore (US$ 18.26 billion) has been made for agriculture and allied sector.
• As per the Economic Survey 2024-25, for FY25, the MSP for arhar and bajra has been increased by 59% and 77% over the weighted average
cost of production, respectively. Moreover, the MSP for Masur has risen by 89%, while rapeseed has seen an impressive increase oRs. 98%.
• As per the Economic Survey 2024-25, since FY16, the government has implemented the Per Drop More Crop initiative under PMKSY, covering 95.58 lakh hectares by December 2024 with Rs. 21,968.75 crore (US$ 2.57 billion) released to states for micro-irrigation, offering 55% subsidy to small/marginal farmers and 45% to others. From 2018 to 2024, loans worth Rs. 4,709 crore (US$ 551 million) were approved under the Micro Irrigation Fund (MIF), with Rs. 3,640 crore (US$ 426.5 million) disbursed, supported by a 2% interest subvention to states.
Road Ahead
Indias agriculture sector is poised for sustained growth, supported by rising exports, greater investments, and targeted policy interventions. Agriculture and fisheries exports grew from Rs. 2,49,264 crore (US$ 35.16 billion) in FY20 to Rs. 4,50,839.85 crore (US$ 53.24 billion) in FY25, registering a CAGR oRs. 12.58%. Tamil Nadu has set an ambitious target of Rs. 42,745 crore (US$ 5 billion) in seafood exports by strengthening coastal infrastructure and promoting value addition, while India as a whole aims to achieve Rs. 8,549 crore (US$ 1 billion) turmeric exports by 2030 through the National Turmeric Board and the SPICED scheme, retaining its dominant 58-66% global market share.
Stronger investment in infrastructure is expected to further boost momentum. Over the next five years, the central government plans to attract US$ 9 billion in the fisheries sector under the PM Matsya Sampada Yojana. In parallel, the Union Cabinet has approved the Prime Minister Dhan-Dhaanya Krishi Yojana (PMDDKY), with an outlay of Rs. 24,000 crore (US$ 2.79 billion) from FY26, to enhance farm productivity, irrigation, credit access, and postharvest facilities for 1.7 crore farmers across 100 districts.
The Ministry of Food Processing Industries (MoFPI) is also pushing ahead with investments in food processing through the continued implementation of PMKSY, with an allocation of Rs. 4,600 crore (US$ 559.4 million) till March 2026.
Agricultural credit is another area of focus. Projections indicate that credit will exceed Rs. 31.5 lakh crore (US$ 368.55 billion) in FY26, supported by the National Bank for Agriculture and Rural Development (NABARD) as it works to address regional disparities and extend support to tenant farmers. The adoption of food safety and quality assurance frameworks such as Total Quality Management (TQM), ISO 9000, ISO 22000, HACCP, Good Manufacturing Practices (GMP), and Good Hygienic Practices (GHP) is expected to improve product standards, support exports, and increase global competitiveness of Indian agri-products.
Crop diversification and innovation will also play a critical role in shaping the sectors outlook. India is expected to become self-sufficient in pulses in the coming years, backed by early-maturing seed varieties and higher minimum support prices. Maize production could potentially double to 86 million tonnes by 2047, offering attractive opportunities through high-yield seeds and better crop management. The dairy sector is projected to expand by 11-13% in FY26, driven by value-added products (VAPs) and investments worth Rs. 3,400 crore (US$ 398 million), raising the share of VAPs to 45% while improving margins by 20-30 basis points.
Overall, with strategic investments in infrastructure, continued reforms, and a strong export pipeline, Indias agriculture sector is well-positioned to sustain growth, diversify output, and strengthen its global footprint in the coming decade.
(Source: IBEF - Agriculture in India)
2.4. Indian Fertilizer Outlook
Under the visionary leadership of Prime Minister Narendra Modi over the last 12 years, the Department of Fertilizers has achieved monumental milestones, driving India toward complete selfreliance (Atmanirbhar Bharat) and insulating its annadatas (farmers) from unprecedented global market disruptions.
Despite severe geopolitical conflicts in West Asia causing skyrocketing prices, acute shortages of natural gas, and heavily delayed shipping lines, the Government of India has mounted a proactive, warfooting response to ensure seamless fertilizer sufficiency.
12 Years of Unparalleled Achievements & Domestic Production Surge (2014-2026)
Urea Plant Revolution: Six new mega urea plants have been established since 2014, adding a remarkable annual capacity increase oRs. 76.2 lakh metric tonnes (LMT). Two more high-capacity urea plants with a combined annual capacity oRs. 25.4 LMT are set to commence production shortly.
Record-Breaking Urea Output: Indias domestic urea production surged from a mere 225 LMT in 2014-15 to an all-time record high oRs. 314.07 LMT in 2023-24. In the latest fiscal year 2024-25, production remained stellar at 306.67 LMT.
Phosphatic and Potassic (P&K) Growth: Mirroring the success in urea, P&K fertilizer manufacturing reached a historic high oRs. 211.22 LMT in 2024-25, scaling up significantly from 159.54 LMT in 2014-15. Public and private sectors are continuing this momentum by constructing state-of-the-art P&K production plants.
Resilient Crisis Management & Unprecedented Buffer Stock for KhariRs. 2026
To address shipping delays around the Strait of Hormuz, the government rapidly explored alternative transit routes and engaged diplomatic channels to source materials directly from global producers. Under PM Modis direct guidance, seven Empowered Groups of Secretaries were constituted—with the Fertilizer Secretary leading 10 high-level reviews—guaranteeing seamless interministerial synergy and solving domestic natural gas supply issues in coordination with the Ministry of Petroleum and Natural Gas.
Historic Buffer Stock: Against a projected total requirement re-assessed by DA&FW at 383.9 LMT, against this stock as on today is around 195.79 LMT (more than 51%) for the upcoming KhariRs. 2026 season, India holds an opening stock of approximately 200.98 LMT. This represents an unprecedented advance availability of over 51 %, far exceeding the traditional buffer standard oRs. 33.
Post-Crisis Net Gain: Domestic post-crisis
production stood solid at 118.15 LMT. When combined with strategic imports and successfully concluded joint global tenders, the total post-crisis fertilizer availability witnessed a net addition oRs. 153.79 LMT.
Absolute Price Insulation for Farmers
The Modi government has kept the interests of the farmers paramount by absorbing international inflationary shocks. While geopolitical conflicts have sent global prices soaring, the retail price of fertilizers for Indian farmers has not been raised by a single paisa:
- Urea: While the global market price exceeds Rs. 4100 per bag, Indian farmers continue to get the 45-kg bag at a heavily subsidized rate of just Rs. 266.5.
- DAP: Against a global price commanding over Rs. 5,000 per 50-kg bag, it is being made available to Indian farmers at a mere Rs. 1,350.
Transition Towards Sustainable and Green Agriculture
Spurred by the Prime Ministers vision to protect "Dharati Maa" and optimize nutrient balance, a massive nationwide mass-awareness campaign was executed from March to May. Farmers have responded with overwhelming enthusiasm:
- Combined sales of eco-friendly alternatives like Fortified Organic Manure (FOM), Liquid FOM (LFOM), and Phosphate-Rich Organic Manure (PROM) soared to seven times the volume in Financial Year 2025-26 compared to 2024-25.
- Ammonium Sulphate consumption surged by nearly 60,000 tonnes.
- Green manuring was introduced across a record 1.84 lakh hectares under the technical guidance of Krishi Vigyan Kendras (KVKs).
In conclusion, Indias fertilizer security remains strong, stable, and well-managed, with availability consistently exceeding requirements across all major fertilizers. Through the highly effective and strategic initiatives of the Government of India, domestic production continues to scale new heights, ensuring that the nation maintains a robust and uninterrupted reserve. This comprehensive preparedness guarantees that the critical agricultural needs of our annadatas are met seamlessly, providing them with reliable, hassle-free access to essential fertilizers at highly affordable and subsidized rates.
Amid the evolving situation in West Asia, the Government of India continues its efforts to keep
citizens informed through regular updates. In this regard, a media briefing was held today at the National Media Centre, where officers from the Ministry of Petroleum and Natural Gas and Ministry of Ports, Shipping and Waterways provided updates on fuel availability and maritime operations and measures being undertaken to maintain stability across key sectors. The Ministry of Chemicals and Fertilizers has also shared updates regarding the availability and stock position of fertilizers in the country.
Fertilizer stock position and availability
Overall Stock Position of Fertilizers in the country is comfortable.
For KhariRs. 2026, the fertiliser requirement has been re-assessed by DA&FW at 383.9 LMT, against this stock as on today is around 197.56 LMT (more than 51%), significantly higher than the usual level of about 33%. This reflects improved planning, advance stocking, and efficient logistics management by the Government.
Indian farmers already purchased total 86.65 LMT chemical fertilizers in the on-going Kharif-2026 till 07.06.2026. Approx. 22.57% of the total requirement.
Indian farmers procured 11.17 LMT of organic manure (FOM/LFOM/PROM) after the war (Punjab 2.83 LMT, UP 2.71 LMT, Haryana 1.33 LMT, MP 1.25 LMT, Gujarat 0.96 LMT, Maharashtra 0.84 LMT) compared to 3.20 LMT during the corresponding period last year. This substantial increase reflects a positive trend towards greater adoption of organic nutrient sources and indicates a gradual shift in farmers preference from chemical fertilizers to organic alternatives.
At present, no major challenge in the availability of fertilizers for the on-going Kharif Season.
Domestic production and import of fertilizers after crisis;-(Lakh Tons)
| Product | Domestic production after crisis | Import reached on Indian Ports after crisis |
| Urea | 69.15 | 18.35 |
| DAP | 9.78 | 2.53 |
| NPKs | 22.13 | 7.87 |
| SSP | 13.14 | 0 |
| MOP | 0 | 4.45 |
| Total | 114.20 | 33.20 |
Total of approx. 147.40 LMT fertilizers through imports and Domestic production has been added in the availability after crisis situation.
In the on-going June, it is expected to reach more than 25 LMT imported Urea, DAP and NPKs on the Indian ports.
India has issued another global tender for procurement oRs. 17 LMT Urea, which are under progress.
Availability of inputs for production of fertilizers i.e. Urea and P&K fertilizers is being regularly reviewed by the Department of Fertilizers.
DoF is regularly paying all the subsidy bills raised by the companies on weekly basis and at present, adequate budget is available for payment of fertilizers subsidy.
11 Meetings of EGoS held till date to ensure the adequate availability of the fertilizers and most of the challenges in the availability addressed by EGoS.
Indias fertiliser security remains strong, stable, and well-managed, with availability consistently exceeding requirement across all major fertilisers.
(Source: PIB)
3. SWOT Analysis
STRENGTHS
Established Industry Presence: With nearly three decades of experience in the fertilizer industry, we have built strong manufacturing expertise, operational capabilities and long-standing relationships with customers and channel partners, enabling us to maintain a credible position in the market.
Diversified Crop Nutrition Portfolio: Our product portfolio comprises Single Super Phosphate (SSP), Zincated SSP, Boronated SSP, NPK Fertilizers and Zinc Sulphate, enabling us to cater to diverse crop nutrient requirements while reducing dependence on a single product category over the long term.
Strong Brand Recognition: Our brands, "RATNAM" and "BPPL", have earned the trust of farmers, distributors and institutional customers through consistent product quality, reliability and effective crop performance, supporting customer retention and repeat business.
Strategically Located Manufacturing Facility: Our
manufacturing facility at Dewas, Madhya Pradesh, offers logistical advantages through proximity to key agricultural markets and transportation networks, enabling efficient distribution and timely product availability.
Robust Distribution Network: We have established a wide distribution network comprising distributors, dealers, retailers, wholesalers and institutional customers across multiple agricultural states, enabling us to efficiently serve a large farming community and strengthen market penetration.
Continuous Investment in Infrastructure: During FY2025-26, we invested over Rs. 13.00 crore towards expanding warehousing capacity, restructuring our granulation plant, replacing critical equipment and strengthening our manufacturing infrastructure, enhancing operational efficiency and supporting future growth.
Diversified Business Through Subsidiary: Our
subsidiary, Jyoti Weighing Systems Private Limited, provides an additional growth avenue in industrial weighing solutions, enabling business diversification beyond fertilizers and creating longterm value creation opportunities.
Product Concentration: A significant portion of our revenue is generated from Single Super Phosphate (SSP), making our business relatively dependent on the demand dynamics and pricing trends of a limited product portfolio.
Geographical Concentration of Manufacturing: Our
manufacturing operations are primarily concentrated at a single production facility in Dewas, Madhya Pradesh. Any disruption arising from natural calamities, infrastructure failures or regulatory restrictions at this location could impact production and product availability.
Dependence on Raw Material Availability: The
availability and pricing of key raw materials such as rock phosphate, sulphur and other chemical inputs remain subject to domestic and international market fluctuations, which could impact production costs and profitability.
Working Capital Intensive Business: The fertilizer industry requires significant working capital due to seasonal demand patterns, inventory management requirements and credit extended to dealers and distributors, resulting in higher funding
requirements.
Exposure to Seasonal Demand: Demand for fertilizer products is closely linked to cropping patterns, monsoon conditions and agricultural cycles, resulting in seasonal fluctuations in sales and inventory levels.
Segments: While we have diversified our portfolio, our presence in premium specialty fertilizers and advanced crop nutrition products is still developing, compared with larger integrated fertilizer
manufacturers.
OPPORTUNITIES
Growing Demand for Balanced Crop Nutrition:
Increasing awareness among farmers regarding soil health, micronutrient deficiencies and balanced fertilizer application is expected to drive demand for value-added fertilizers such as Zinc Sulphate, fortified SSP and NPK products.
Capacity Expansion and Operational Scale-Up:
Recent investments in warehousing, manufacturing infrastructure and process improvements provide opportunities to increase production efficiency, improve capacity utilisation and support higher sales volumes in the coming years.
Expansion into New Markets: We continue to explore opportunities to strengthen our presence across existing agricultural markets while expanding into new domestic regions and select international export markets, thereby diversifying our revenue base.
Government Support for Agriculture: Continued government focus on food security, balanced fertilization, soil health improvement, irrigation development and sustainable agricultural practices is expected to support long-term demand for quality fertilizer products.
Product Diversification and Innovation: We intend to continue strengthening our product portfolio by developing value-added crop nutrition products and expanding our offerings to address evolving agricultural requirements, thereby enhancing our competitive positioning.
Growth in Industrial Weighing Solutions: Through Jyoti Weighing Systems Private Limited, we are well-positioned to capitalise on increasing investments in infrastructure, logistics and intelligent transportation systems, creating a complementary growth platform alongside our fertilizer business.
Rising Focus on Sustainable Agriculture: Growing emphasis on improving soil health, nutrient-use efficiency and sustainable farming practices presents significant opportunities for manufacturers offering balanced and scientifically developed crop nutrition solutions.
THREATS
Regulatory and Policy Changes: The fertilizer industry remains significantly influenced by government policies relating to subsidies, nutrient-based pricing, environmental regulations and import policies. Any adverse policy changes may impact industry profitability and demand.
Volatility in Raw Material Prices: Prices of key raw
materials, fuel, energy and freight remain susceptible to global supply-demand dynamics and geopolitical developments, which could adversely affect operating margins.
Intense Industry Competition: The Indian fertilizer industry is highly competitive, with the presence of large integrated manufacturers, cooperative institutions and regional players, leading to pricing pressure and increased competition for market share.
Climate and Weather Risks: Variability in monsoon patterns, droughts, floods and other adverse climatic conditions may impact agricultural activity, resulting in lower fertilizer consumption and fluctuations in demand.
Foreign Exchange Risk: Dependence on imported raw materials exposes the Company to foreign currency fluctuations, which may increase procurement costs and impact profitability.
Supply Chain Disruptions: Global geopolitical uncertainties, transportation bottlenecks and disruptions in the supply chain may affect the timely availability of raw materials and increase operational costs.
Changing Farmer Preferences and Market Dynamics:
Evolving farming practices, increasing adoption of alternative nutrient solutions and changing customer preferences may require continuous product innovation and market adaptation to sustain competitiveness.
4. Company Overview
We are engaged in the manufacturing of phosphate-based fertilizers and micronutrient products, catering to the evolving nutritional requirements of Indias agricultural sector. Established in 1996 and headquartered in Indore, Madhya Pradesh, we have built nearly three decades of expertise in developing high-quality crop nutrition solutions that support sustainable agricultural growth and improved farm productivity.
Our diversified product portfolio comprises Single Super Phosphate (SSP), NPK Fertilizers and Zinc Sulphate, marketed under our trusted brands, "RATNAM" and "BPPL". Supported by our strategically located manufacturing facility at Dewas, Madhya Pradesh, we currently operate an installed production capacity oRs. 1,72,800 MTPA across fertilizer products, enabling us to efficiently serve customers across multiple agricultural
markets. We continue to strengthen our market presence through a well-established distribution network comprising dealers, distributors, retailers and institutional customers, while also expanding our reach in select international markets.
In addition to our core fertilizer business, we have diversified into industrial weighing solutions through our subsidiary, Jyoti Weighing Systems Private Limited, thereby creating an additional avenue for long-term growth. Guided by our commitment to quality, operational excellence and customer satisfaction, we continue to invest in manufacturing infrastructure, product innovation and operational capabilities to create sustainable value for our stakeholders while contributing to Indias agricultural development.
FINANCIAL PERFORMANCE
CONSOLIDATED PROFIT AND LOSS STATEMENT
| " | Year ended March 31, 2026 | Year ended March 31, 2025 | |||
| Rs. in lakhs | % of Total Revenue | Rs. in lakhs | % of Total Revenue | Y-o-Y % Change | |
| Revenue from Operations | 17,047.38 | 99.58% | 12,651.58 | 98.41% | 34.75% |
| Other Income | 72.36 | 0.42% | 204.70 | 1.59% | -64.65% |
| Total Income (I) | 17,119.74 | 100.00% | 12,856.28 | 100.00% | 33.16% |
| EXPENSES | |||||
| Cost of Materials Consumed | 12,083.08 | 70.58% | 8,244.13 | 64.13% | 46.57% |
| Purchase of Traded Goods | - | - | - | - | - |
| Changes in inventories of finished goods and work-in-progress | (754.67) | -4.41% | 132.63 | 1.03% | 669.00% |
| Employee Benefits Expense | 990.56 | 5.79% | 822.50 | 6.40% | 20.43% |
| Finance Costs | 358.99 | 2.10% | 389.00 | 3.03% | -7.71% |
| Depreciation and Amortisation Expense | 114.47 | 0.67% | 94.89 | 0.74% | 20.63% |
| Other Expenses | 2,829.31 | 16.53% | 2,108.97 | 16.40% | 34.16% |
| Total Expenses (II) | 15,621.74 | 91.25% | 11,792.13 | 91.72% | 32.48% |
| Profit Before Exceptional and Extraordinary items and Tax (III = I-II) | 1,498.00 | 8.75% | 1,064.15 | 8.28% | 40.77% |
| Extraordinary items (IV) | - | - | - | - | - |
| Profit Before Tax (III + IV) | 1,498.00 | 8.75% | 1,064.15 | 8.28% | 40.77% |
| Tax Expense | - | ||||
| (1) Current Tax | 475.18 | 2.78% | 280.97 | 2.19% | 69.12% |
| (2) Deferred Tax | 0.41 | 0.00% | (8.61) | -0.07% | 104.76% |
| (3) Current taxes relating to earlier years | - | - | - | - | - |
| Profit for the year | 1,022.41 | 5.97% | 791.79 | 6.16% | 29.13% |
| Attributable to | 0.00% | 0.00% | - | ||
| Owners of the parent | 1,022.39 | 5.97% | 791.77 | 6.16% | 29.13% |
| Non-controlling interests | 0.02 | 0.00% | 0.01 | 0.00% | 100.00% |
| 0.00% | |||||
| Other Comprehensive Income (OCI) | |||||
| Items that will not be reclassified to profit or loss | 0.00% | 0.00% | - | ||
| - Gain/(Loss) on remeasurement of defined benefit plans | -1.00 | -0.01% | -0.39 | 0.00% | 156.41% |
| - Income tax (expense) / benefit related to items that will not be reclassified to Profit and loss | 0.25 | 0.00% | 0.10 | 0.00% | 150.00% |
| Total Other comprehensive income (Net of Tax) | -0.75 | 0.00% | -0.29 | 0.00% | 158.62% |
| Attributable to | |||||
| Owners of the parent | -0.75 | 0.00% | -0.29 | 0.00% | 158.62% |
| Non-controlling interests | - | - | - | - | - |
| Total Comprehensive Income for the Year | 1,021.66 | 5.97% | 791.50 | 6.16% | 29.08% |
| Attributable to | |||||
| Owners of the parent | 1,021.64 | 5.97% | 791.50 | 6.16% | 29.08% |
| Non-controlling interests | 0.02 | 0.00% | 0.01 | 0.00% | 100.00% |
| Earnings per Equity Share of Rs.10 Each | |||||
| Basic (in Rs) | 4.30 | 4.34 | -0.92% | ||
| Diluted (in Rs) | 4.30 | 4.34 | -0.92% | ||
Consolidated Profit and Loss Statement Performance
A. Total Income
Total income for the year ended March 31, 2026 stood at Rs. 17,119.74 Lakhs, an increase oRs. 33.16% over Rs. 12,856.28 Lakhs in the previous year, led by growth in revenue from operations across both the fertilizer and weighbridge businesses, partly offset by a reduction in other income arising from a non-recurring item in the base year.
Revenue from Operations
Revenue from operations grew by 34.75% to Rs. 17,047.38 Lakhs from Rs. 12,651.58 Lakhs, with growth recorded across both revenue streams. Sale of products increased by 33.38% to Rs. 16,408.81 Lakhs (FY 2024-25: Rs. 12,301.93 Lakhs), while sale of services increased by 82.63% to Rs. 638.56 Lakhs (FY 2024-25: Rs. 349.65 Lakhs). The Fertilizer segment remained the Companys primary revenue driver—anchored by SSP as the best performer at 75% of overall revenue and Zinc Sulphate delivering the highest relative growth, while the Weighbridge segment also delivered healthy growth, reflecting sustained demand across both businesses and highlighting the Companys diversified revenue base.
Other Income
Other income declined to Rs. 72.36 Lakhs in FY 2025-26 from Rs. 204.70 Lakhs in FY 2024-25. The decline is attributable to a one-time write-back of liabilities no longer required amounting to Rs. 144.25 Lakhs recognised in the previous year, which did not recur in FY 2025-26. Excluding this non-recurring item, the underlying components of other income improved, with interest income on bank deposits increasing to Rs. 19.22 Lakhs from Rs. 9.88 Lakhs.
B. EXPENSES Total Expenses
Total expenses increased by 32.48% to Rs. 15,621.74 Lakhs from Rs. 11,792.13 Lakhs, growing at a marginally slower pace than the 34.75% growth in revenue from operations.
Cost of Materials Consumed
Cost of materials consumed increased by 46.57% to Rs. 12,083.08 Lakhs from Rs. 8,244.13 Lakhs, in line with higher production and dispatch volumes during the year. Raw material closing stock nearly doubled to Rs. 2,295.80 Lakhs from Rs. 1,172.26 Lakhs, reflecting a build-up of raw material inventory. The combined cost of materials consumed and net inventory movement remained broadly stable at 66.45% of revenue from operations in FY2025-26, compared with 66.21% in FY2024-25. The inventory build during the year is consistent with strengthening the Companys raw material position against volatility in the prices of key imported inputs, including rock phosphate, sulphur and sulphuric acid.
Changes in Inventories of Finished Goods and Work-in-Progress
The Company recorded a net build-up in finished goods and work-in-progress inventory of Rs. 754.67 Lakhs in FY 2025-26, as against a net drawdown of Rs. 132.63 Lakhs in the previous year. This build-up coincides with the completion of the Companys new warehouse facility, funded out of its IPO proceeds, which is expected to support higher capacity utilisation and more consistent order fulfilment going forward.
Employee Benefits Expense
Employee benefits expense increased by 20.43% to Rs. 990.56 Lakhs from Rs. 822.50 Lakhs, comprising salaries, wages and benefits of Rs. 928.59 Lakhs (FY 2024-25: Rs. 766.81 Lakhs), contribution to provident and other funds of Rs. 47.42 Lakhs (FY 2024-25: Rs. 43.03 Lakhs) and staff welfare expenses of Rs. 14.55 Lakhs (FY 2024-25: Rs. 12.66 Lakhs). As a proportion of revenue from operations, employee benefits expense improved to 5.81% from 6.50%, reflecting operating leverage as revenue grew faster than the employee cost base.
Finance Costs
Finance costs declined by 7.71 % to Rs. 358.99 Lakhs from Rs. 389.00 Lakhs. The decline was led by lower interest on working capital borrowings of Rs. 149.32 Lakhs (FY 2024-25: Rs. 198.65 Lakhs), even as the Companys outstanding current borrowings increased to Rs. 3,303.47 Lakhs as at March 31, 2026 from Rs. 2,576.53 Lakhs as at March 31, 2025. As a proportion of revenue from operations, finance costs improved to 2.11% from 3.07%.
Depreciation and Amortisation Expense
Depreciation and amortisation expense increased by 20.63% to Rs. 114.47 Lakhs from Rs. 94.89 Lakhs, consistent with the increase in the Companys gross fixed asset base to Rs. 1,167.24 Lakhs as at March 31,2026 from Rs. 971.13 Lakhs as at March 31,2025, following capital expenditure of Rs. 197.93 Lakhs incurred, primarily towards plant and equipment and buildings.
Other Expenses
Other expenses increased by 34.16% to Rs. 2,829.31 Lakhs from Rs. 2,108.97 Lakhs, broadly in line with the growth in revenue from operations, with other expenses as a proportion of revenue from operations remaining stable at 16.60% (FY 2024-25: 16.67%). The increase was led by power and fuel costs of Rs. 776.37 Lakhs (FY 2024-25: Rs. 427.36 Lakhs) and freight charges of Rs. 811.40 Lakhs (FY 2024-25: Rs. 629.09 Lakhs), both of which increased with higher production and dispatch volumes, while freight and handling and distribution charges together grew at a slower pace than revenue. Legal and professional expenses increased to Rs. 82.83 Lakhs from Rs. 34.86 Lakhs, and statutory audit fees increased to Rs. 5.80 Lakhs from Rs. 2.00 Lakhs, the increase is attributable to FY2025-26 being the first full financial year following the Companys listing on the SME Platform of NSE Limited on March 7, 2025, whereas FY2024-25 included only approximately 25 days of listing-related compliance and audit costs. In addition, Corporate Social Responsibility (CSR) expenditure, determined based on the average net profit of the preceding three financial years under the Companies Act, 2013, increased to Rs. 16.92 Lakhs from Rs. 12.80 Lakhs and was fully utilised during the year.
C.Profit and Taxation
Profit Before Tax and EBITDA
Profit before tax increased by 40.77% to Rs. 1,498.00 Lakhs from Rs. 1,064.15 Lakhs, reflecting revenue growth, a broadly stable materials cost ratio and operating leverage in employee costs and finance costs. EBITDA increased by 41.37% to Rs. 1,899.10 Lakhs from Rs. 1,343.34 Lakhs, with EBITDA margin at 11.14% of revenue from operations as against 10.62% in the previous year.
Tax Expenses
Total tax expense increased to Rs. 475.60 Lakhs from Rs. 272.36 Lakhs, with current tax increasing by 69.12% to Rs. 475.18 Lakhs (FY 2024-25: Rs. 280.97 Lakhs) in line with higher taxable profits. The effective tax rate for the year was 31.75%, as against 25.59% in FY 2024-25. As per the tax reconciliation forming part of the notes to the consolidated financial statements, this increase is substantially attributable to a higher adjustment for income taxed at special rates (Rs. 91.51 Lakhs in FY 2025-26 as against Rs. 1.63 Lakhs in FY 2024-25). The nature of this income is not further disaggregated in the notes. Deferred tax for the year was a marginal net charge of Rs. 0.41 Lakhs, as against a net credit of Rs. 8.61 Lakhs in FY 2024-25.
Profit After Tax and Earnings per Share
Profit for the year increased by 29.13% to Rs. 1,022.41 Lakhs from Rs. 791.79 Lakhs. PAT margin moderated to 6.00% of revenue from operations from 6.28% in the previous year, primarily due to the higher effective tax rate. Total comprehensive income for the year grew by 29.08% to Rs. 1,021.66 Lakhs (FY2024-25: Rs. 791.50 Lakhs).
Basic and diluted earnings per share stood at Rs. 4.30, as against Rs. 4.34 in FY2024-25, notwithstanding the 29.13% growth in profit after tax. This was due to the increase in the weighted average number of equity shares outstanding to 2,37,77,100 in FY2025-26, reflecting the full-year impact of the equity shares allotted pursuant to the Companys listing on the SME Platform of NSE Limited in March 2025, compared with a weighted average oRs. 1,82,43,949 equity shares in FY2024-25, which reflected the enlarged capital base for only the closing 25 days of the year.
Consolidated Ratio Analysis
| Particulars | FY26 | FY25 |
| Profitability Ratios | ||
| EBITDA Margin | 11.14% | 10.62% |
| EBIT Margin | 10.47% | 9.87% |
| Net Profit Margin | 6.00% | 6.26% |
| Growth Ratios | ||
| Revenue from Operations | 34.75% | -16.52% |
| EBITDA | 41.37% | 11.05% |
| EBIT | 42.95% | 10.98% |
| Net Profit | 29.13% | 31.08% |
| Liquidity Ratio (Times) | ||
| Current Ratio | 2.16x | 2.60x |
| Return Ratios | ||
| Return on Equity | 11.98% | 13.09% |
| Return on Capital Employed | 13.40% | 11.22% |
| Solvency Ratios (Times) | ||
| Interest Coverage Ratio | 4.97x | 3.21x |
| Debt to Equity | 0.47x | 0.39x |
Profitability Ratios
EBITDA margin moderated to 11.14% in FY2025-26 from 10.62% in FY2024-25, while EBIT margin declined to 10.47% from 9.87%, indicating modest pressure on operating profitability despite strong revenue growth. However, the Net Profit Margin moderated to 6.00% in FY2025-26 from 6.26% in FY2024-25, reflecting the impact of higher operating costs and a slight decline in overall earnings conversion despite robust growth in net profit.
Growth Ratios
The Company delivered strong growth across all key financial metrics during FY2025-26. Revenue from Operations increased by 34.75%, supported by healthy demand across its business segments. EBITDA and EBIT grew by 41.37% and 42.95%, respectively, while Net Profit increased by 29.13%, demonstrating robust earnings growth despite a slight moderation in operating margins.
Liquidity Ratio
The Current Ratio declined to 2.16x from 2.60x in FY2024-25, indicating a relatively higher utilisation of working capital. Nevertheless, the ratio remains comfortably above 1.0x, suggesting that the Company continues to maintain a strong liquidity position and is well placed to meet its short-term obligations.
Return Ratios
Return on Equity moderated to 11.98% from 13.09%, with average equity growth oRs. 41.1% outpacing PAT growth oRs. 29.1%. Return on Capital Employed improved to 13.40% from 11.22%, as EBIT growth oRs. 42.95% exceeded the 19.6% increase in capital employed, indicating stronger operating efficiency despite higher borrowings during the year.
Solvency Ratios
The Interest Coverage Ratio improved significantly to 4.97x from 3.21x, reflecting stronger operating earnings and an enhanced ability to service interest obligations. Meanwhile, the Debt-to-Equity Ratio increased to 0.47x from 0.39x, indicating moderately higher leverage during the year. Despite this increase, the leverage level remains comfortable and is supported by the Companys healthy profitability and interest coverage.
Consolidated Cash flow Statement
| Particulars | Year 2025-26 | Year 2024-25 |
| Net cash generated from operating activities | 471.14 | -3,644.18 |
| Net Cash used in investing activities | -1,295.90 | 525.37 |
| Net Cash used in financing activities | 801.41 | 3,145.16 |
| Net (Decrease)/ Increase in cash and cash equivalent ( A+B+C) | -23.35 | 26.35 |
| At the beginning of the year | 45.40 | 19.05 |
| At the end of the year | 22.05 | 45.40 |
Changes in operating cash flow
In Fiscal 2026, net cash from operating activities was Rs. 471.14 lakhs. Profit before tax was Rs. 1,498.00 lakhs and adjustments to reconcile profit before tax to operating profit before working capital changes primarily consisted
of depreciation and amortization of Rs. 114.47 lakhs and Interest and Finance Cost of Rs. 358.99 Lakhs. The main working capital adjustments in year ended March 31, 2026 included increase in Inventories of Rs. 1,808.42 Lakhs, Increase in Trade Receivables of Rs. 2,342.09 Lakhs, increase in Other Current Assets of Rs. 86.39 Lakhs, increase in Trade Payables of Rs. 1,206.21 Lakhs, increase in other current liabilities Rs. 79.47 Lakhs and decrease in short term provisions of Rs. 1.59 Lakhs.
Changes in investing cash flow
Net cash used in investing activities was Rs. 1,295.90 lakhs in the year ended March 31, 2026, primarily on account of purchase of fixed assets aggregating to Rs. 1,233.86 Lakhs and increase in Term Deposits of Rs. 104.31 Lakhs, partly offset by interest received of Rs. 41.81 Lakhs and proceeds from sale of property, plant and equipment of Rs. 0.46 Lakhs.
Changes in financing cash flow
Net cash from financing activities was Rs. 801.41 Lakhs in the year ended March 31, 2026, on account of increase in borrowings of Rs. 1,120.40 Lakhs, receipt of subsidy towards IPO expenses of Rs. 40.00 Lakhs and interest paid of Rs. 358.99 Lakhs
STANDALONE PROFIT AND LOSS STATEMENT
| " | Year ended March 31, 2026 | Year ended March 31, 2025 | |||
| Rs. in lakhs | % of Total Revenue | Rs. in lakhs | % of Total Revenue | Y-o-Y % Change | |
| INCOME | |||||
| Revenue from Operations | 13,547.64 | 99.51% | 9,871.75 | 98.01 % | 37.24% |
| Other Income | 67.10 | 0.49% | 200.33 | 1.99% | -66.50% |
| TOTAL INCOME | 13,614.75 | 100.00% | 10,072.08 | 100.00% | 35.17% |
| EXPENSES | |||||
| a. Cost of Materials Consumed | 9,455.84 | 69.45% | 6,458.33 | 64.12% | 46.41% |
| b. Purchase of Traded Goods | 0.00 | 0.00% | 0.00 | 0.00% | - |
| c. Changes In Inventories of Finished goods and Work in Progress | -306.68 | -2.25% | 248.56 | 2.47% | -223.38% |
| d. Employees benefits expenses | 361.35 | 2.65% | 283.81 | 2.82% | 27.32% |
| e. Finance Cost | 321.81 | 2.36% | 375.05 | 3.72% | -14.20% |
| f. Depreciation and amortization expenses | 99.65 | 0.73% | 89.58 | 0.89% | 11.24% |
| g. Other Expenses | 2,322.33 | 17.06% | 1,638.37 | 16.27% | 41.75% |
| TOTAL EXPENSES | 12,254.30 | 90.01% | 9,093.71 | 90.29% | 34.76% |
| Profit / (Loss) before exceptional and extraordinary items and tax (I - II) | 1360.44 | 9.99% | 978.37 | 9.71% | 39.05% |
| Exceptional Items | 0.00% | 0.00% | - | ||
| Profit/(Loss) before extraordinary items and tax (III - IV) | 1360.44 | 9.99% | 978.37 | 9.71% | 39.05% |
| Extraordinary items | 0.00% | 0.00% | - | ||
| PROFIT BEFORE TAX (V - VI) | 1360.44 | 9.99% | 978.37 | 9.71% | 39.05% |
| TAX EXPENSE | |||||
| a. Current Tax | 418.27 | 3.07% | 257.43 | 2.56% | 62.48% |
| b. Deferred Tax | (1.52) | -0.01 % | (9.05) | -0.09% | -83.20% |
| c. Excess/Short Provision of Earlier Year Tax | 0.00% | - | 0.00% | - | |
| TOTAL TAX EXPENSE | 416.75 | 3.06% | 248.38 | 2.47% | 67.79% |
| PROFIT AFTER TAX (VII - VIII) | 943.69 | 6.93% | 729.99 | 7.25% | 29.27% |
| OTHER COMPREHENSIVE INCOME (NET OF TAX) | |||||
| Items that will not be reclassified to profit or loss | 0.00% | 0.00% | - | ||
| a.Gain/(Loss) on remeasurement of defined benefit plans | (1.00) | -0.01 % | (0.39) | 0.00% | 158.83% |
| b. Equity Instruments through OCI | 0.00% | 0.00% | - | ||
| c. Income tax related to items that will not be reclassified to Profit and loss | 0.25 | 0.00% | 0.10 | 0.00% | 158.83% |
| TOTAL OTHER COMPREHENSIVE INCOME (NET OF TAX) | (0.75) | -0.01% | (0.29) | 0.00% | 158.83% |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (IX + X) | 942.95 | 6.93% | 729.70 | 7.24% | 29.22% |
| EQUITY | |||||
| Equity Share Capital | 2,377.71 | 17.46% | 2,377.71 | 23.61 % | 0.00% |
| Other Equity | 6,397.74 | 46.99% | 5,414.80 | 53.76% | 18.15% |
| EARNING PER SHARE - BASIC AND DILUTED (Not Annualised) | |||||
| i) Basic (Rs.) | 3.97 | 4.00 | -0.85% | ||
| ii) Diluted (Rs.) | 3.97 | 4.00 | -0.86% | ||
Standalone Profit and Loss Statement Performance Total Income
Total income rose to Rs. 13,614.75 Lakhs in FY26 from Rs. 10,072.08 Lakhs in FY25, an increase oRs. 35.17% (+Rs. 3,542.67 Lakhs), driven almost entirely by strong growth in core operating revenue, even as other income moderated from an elevated, non-recurring base in the prior year.
Revenue from Operations
Revenue from operations grew to Rs. 13,547.64 Lakhs in FY26 from Rs. 9,871.75 Lakhs in FY25, up 37.24% (+Rs. 3,675.90 Lakhs). The growth was broad-based:
• Sale of products increased to Rs. 13,240.98 Lakhs from Rs. 9,841.23 Lakhs (+34.55%), primarily driven by higher sales of Single Super Phosphate (SSP), which remained the Companys principal product category.
• Sale of services scaled up sharply to Rs. 306.67 Lakhs from Rs. 30.52 Lakhs, indicating early but encouraging growth in the Companys diversification into service-based revenue streams.
Other Income
Other income moderated to Rs. 67.10 Lakhs in FY26 from Rs. 200.33 Lakhs in FY25. This is not reflective of any underlying weakness. FY25 included a one-time write-back of liabilities no longer required of Rs. 144.25 Lakhs, which lifted the base that year. Excluding this one-off, the recurring components actually held firm i.e. interest income was broadly stable at Rs. 37.10 Lakhs, and FY26 additionally includes a fresh Rs. 30 Lakhs recovery towards penalty for breach of contract, reflecting continued prudence in treasury and receivables management.
Cost of Materials Consumed
Cost of materials consumed increased to Rs. 9,455.84 Lakhs from Rs. 6,458.33 Lakhs, up 46.41%, tracking the higher production and sales volumes. Purchases of raw materials rose to Rs. 10,791.65 Lakhs from Rs. 6,952.24 Lakhs, while closing raw material stock was built up to Rs. 2,121.63 Lakhs from Rs. 785.81 Lakhs, a deliberate stocking strategy ahead of the season to secure input availability and support off-season production planning.
Changes in Inventories of Finished Goods and Work-in-Progress
This line moved to f(306.68) Lakhs in FY26 from Rs. 248.56 Lakhs in FY25, on account of a healthy build-up in closing finished goods and WIP inventory. The company increased inventory in FY26 to prepare for expected demand from institutional customers and the upcoming fertilizer season, ensuring it could meet orders quickly in FY27.
Employee Benefits Expense
Employee benefits expense increased by 27.32% to Rs. 361.35 Lakhs from Rs. 283.81 Lakhs in FY2025-26, reflecting the higher employee cost base associated with the Companys expanding scale of operations.
Finance Costs
Finance costs declined to Rs. 321.81 lakhs from Rs. 375.05 lakhs, representing a reduction oRs. 14.20% (Rs. 53.24 lakhs), primarily driven by lower interest costs on working capital borrowings. The reduction was supported by the availability of working capital funds from the IPO proceeds, which reduced the companys reliance on higher - cost working capital borrowings. This decline was achieved despite an increase in total borrowings during the year, indicating improved financing mix and more efficient utilisation of working capital.
Depreciation and Amortisation Expense
Depreciation increased to Rs. 99.65 Lakhs from Rs. 89.58 Lakhs (+11.24%), the increase reflects capital expenditure of Rs. 191.43 Lakhs incurred during the year, primarily towards Plant & Equipment (Rs. 152.13 Lakhs) and Buildings (Rs. 31.44 Lakhs), with smaller investments in Electric Equipment, Furniture & Fixtures and Motor Cycles, compared with capital additions of Rs. 63.00 Lakhs in FY2024-25.
Other Expenses
Other expenses increased to Rs. 2,322.33 Lakhs from Rs. 1,638.37 Lakhs, up 41.75%, largely a function of higher throughput:
• Power and fuel more than doubled to Rs. 796.99 Lakhs from Rs. 394.54 Lakhs, in line with higher plant utilization.
• Freight charges rose to Rs. 749.45 Lakhs from Rs. 583.08 Lakhs (+28.53%) and handling & distribution charges to Rs. 276.19 Lakhs from Rs. 244.72 Lakhs (+12.86%), both scaling with the higher volumes dispatched.
• Provision for expected credit losses was increased to Rs. 21.36 Lakhs from Rs. 13.61 Lakhs, a prudent step reflecting the growth in the trade receivables base rather than any deterioration in credit quality. Importantly, despite the increase in absolute cost, gross margins were broadly maintained approximately 32-33%, reflecting the Companys ability to pass through input cost pressures while scaling volumes.
Total Expenses
Total expenses increased to Rs. 12,254.30 Lakhs from Rs. 9,093.71 Lakhs, up 34.76%, growing broadly in line with the 35.17% growth in total income, reflecting improved operating efficiency as the business expanded.
Profit Before Tax
PBT grew to Rs. 1,360.44 Lakhs from Rs. 978.37 Lakhs, up a healthy 39.05% (+Rs. 382.08 Lakhs), with profit growth outpacing revenue growth, which indicates that operating leverage is beginning to take effect.
Tax Expense
Total tax expense increased to Rs. 416.75 Lakhs from Rs. 248.38 Lakhs, broadly in line with the higher taxable profit (Note 31). Current tax rose to Rs. 418.27 Lakhs from Rs. 257.43 Lakhs (+62.48%). The effective tax rate moved to 30.63% from 25.39%, mainly on account of a higher quantum of non-deductible expenses (Rs. 70.41 Lakhs in FY26 vs Rs. 1.63 Lakhs in FY25).
Profit for the Year
Profit for the year grew to Rs. 943.69 Lakhs from Rs. 729.99 Lakhs, an increase oRs. 29.28% (+Rs. 213.71 Lakhs), underscoring a strong overall earnings performance for the year.
Earnings Per Share
Basic and diluted EPS were largely steady at Rs. 3.97 versus Rs. 4.00 in FY25, a marginal easing despite the strong absolute profit growth which is attributable to the expanded weighted-average equity share base following the Companys IPO, which is expected to normalize as full-year earnings from the enlarged capital base flow through in subsequent periods.
Standalone Ratio Analysis
| Particulars | FY26 | FY25 |
| Profitability Ratios | ||
| EBITDA Margin | 12.66% | 12.59% |
| EBIT Margin | 11.92% | 11.68% |
| Net Profit Margin | 6.97% | 7.39% |
| Growth Ratios | ||
| Revenue from Operations | 37.24% | -16.47% |
| EBITDA | 37.99% | 13.62% |
| EBIT | 40.07% | 13.96% |
| Net Profit | 29.28% | 40.36% |
| Liquidity Ratio (Times) | ||
| Current Ratio | 2.26x | 2.78x |
| Return Ratios | ||
| Return on Equity | 11.39% | 13.10% |
| Return on Capital Employed | 13.60% | 12.79% |
| Solvency Ratios (Times) | ||
| Interest Coverage Ratio | 5.02x | 3.07x |
| Debt to Equity | 0.41x | 0.36x |
Profitability Ratios
On an operating basis, EBITDA and EBIT margins actually improved, EBITDA to 12.66% from 12.59%, EBIT to
11.92% from 11.68%. Net Profit Margin still fell to 6.97% from 7.39%, but not because of operations. The pressure sits below EBIT entirely, in the higher effective tax rate oRs. 30.63% versus 25.39%, driven largely by income taxed at special rates this year.
Growth Ratios
Our Company reported a strong recovery in FY2025-26, with Revenue from Operations growing by 37.24% following a 16.47% decline in FY2024-25. EBITDA and EBIT increased by 37.99% and 40.07%, respectively, although both grew at a slower pace than revenue, resulting in a modest compression in operating margins. Net Profit rose by 29.28%, supported by a 14.20% reduction in finance costs. While FY2024-25 delivered stronger margin expansion, FY2025-26 recorded the Companys highest Revenue and Net Profit during the period under review.
Liquidity Ratio
The Current Ratio declined to 2.26x from 2.78x in FY2024-25, primarily due to an increase in current borrowings, which grew faster than current assets. Despite the decline, the ratio remained comfortably above 1.0x, indicating that the Company continues to maintain a healthy liquidity position and adequate coverage of its short-term obligations.
Return Ratios
Return on Equity moderated to 11.39% from 13.10%, as average shareholders equity grew faster than PAT following the IPO related capital infusion. Return on Capital Employed improved to 13.60% from 12.79%, as EBIT growth oRs. 24.3% outpaced the 16.8% rise in capital employed, reflecting more efficient use of operating capital even as borrowings increased.
Solvency Ratios
The Interest Coverage Ratio improved significantly to 5.02x from 3.07x, driven by higher operating earnings and lower finance costs, thereby strengthening the Companys ability to service its debt obligations. Although the Debt-to-Equity Ratio increased to 0.41x from 0.36x due to higher borrowings, the improvement in interest coverage indicates that the additional leverage did not materially weaken the Companys financial position.
Standalone Cash flow Statement
| Particulars | Year Ended Mar 31, 2026 | Year Ended Mar 31, 2025 |
| Net cash generated from operating activities | 656.28 | (3311.08) |
| Net cash used for investing activities | (1197.61) | 428.98 |
| Net cash generated from financing activities | 516.07 | 2905.65 |
| Net increase/ (decrease) in cash or cash equivalents (A+B+C) | (25.27) | 23.55 |
| Cash and cash equivalents at beginning of period / year | 30.48 | 6.92 |
| Cash and cash equivalents at end of period / year | 5.21 | 30.48 |
Changes in operating cash flow
In Fiscal 2026, net cash from operating activities was Rs. 656.27 lakhs. Profit before tax was Rs. 1,360.44 lakhs and adjustments to reconcile profit before tax to operating profit before working capital changes primarily consisted of depreciation and amortization of Rs. 99.65 lakhs and Interest and Finance Cost of Rs. 321.81 Lakhs. The main working capital adjustments in year ended March 31, 2026 included increase in Inventories of Rs. 1,514.69 Lakhs, Increase in Trade Receivables of Rs. 2,123.60 Lakhs, increase in Other Current Assets of Rs. 18.44 Lakhs, increase in Trade Payables of Rs. 1,021.68 Lakhs, increase in other current liabilities Rs. 58.11 Lakhs and decrease in short term provisions of Rs. 1.59 Lakhs.
Changes in investing cash flow
Net cash used in investing activities was Rs. 1,197.62 lakhs in the year ended March 31, 2026, primarily on account of purchase of fixed assets aggregating to Rs. 1,061.72 Lakhs, increase in Term Deposits of Rs. 100.00 Lakhs and increase in Loans of Rs. 73.00 Lakhs.
Changes in financing cash flow
Net cash from financing activities was Rs. 516.07 Lakhs in the year ended March 31,2026, on account of increase in borrowings of Rs. 797.88 Lakhs, receipt of subsidy towards IPO expenses of Rs. 40.00 Lakhs and interest paid of Rs. 321.81 Lakhs.
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IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132 (Member ID - NSE: 10975 BSE: 179 MCX: 55995 NCDEX: 01249), DP SEBI Reg. No. IN-DP-185-2016, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, Merchant Banker SEBI Regn. No. INM000010940, RA SEBI Regn. No: INH000000248, BSE Enlistment Number (RA): 5016, AMFI-Registered Mutual Fund Distributor & SIF Distributor
ARN NO : 47791 (Date of initial registration – 17/02/2007; Current validity of ARN – 08/02/2027), PFRDA Reg. No. PoP 20092018, IRDAI Corporate Agent (Composite) : CA1099
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
