National Fertilizer Ltd Management Discussions

Indias Fertilizer Market

Fertilizer Production, Import & Sales during FY 2025-26:

The Indian economy continued to demonstrate resilience during FY 2025-26 amidst evolving global economic conditions, geopolitical uncertainties and commodity price volatility. Strong domestic demand, stable macroeconomic fundamentals and sustained Government investment in infrastructure and agriculture supported economic growth.

The agriculture sector remained one of the key pillars of the Indian economy. Favourable monsoon conditions across most regions, improved reservoir levels and continued Government support through various agricultural schemes contributed to healthy agricultural activity and fertilizer consumption during the year.

The Indian fertilizer sector continued to play a pivotal role in ensuring food security and enhancing agricultural productivity. During FY 2025-26, the sector operated in an environment characterized by evolving nutrient consumption patterns, government emphasis on balanced fertilization and continued policy support under nutrient subsidy mechanisms.

The Governments sustained focus on self-reliance in urea production, promotion of nano fertilizers, digitization of subsidy administration and support for sustainable agricultural practices contributed positively to the industrys long-term growth prospects.

Favourable monsoon conditions across major agricultural regions supported crop acreage and fertilizer demand during the Kharif and Rabi seasons. Demand for complex fertilizers, micronutrients, bio-fertilizers and specialty fertilizers continued to increase as farmers adopted balanced nutrient management practices.

During FY 2025 26, while domestic production of major fertilizers such as urea and Di-Ammonium Phosphate (DAP) declined marginally, fertilizer sales continued to increase. To bridge the gap between domestic supply and demand, imports rose signi cantly, particularly for urea and DAP.

Between April 2025 and January 2026, domestic urea production stood at 251.26 lakh metric tonnes (LMT), a decline of 2.8% from the previous year. However, urea sales increased to 352.61 LMT, re ecting continued demand from the agricultural sector. To meet this requirement, urea imports surged by 83.4%, reaching 89.30 LMT.

DAP production declined slightly to 33.71 LMT compared with 34.25 LMT in the previous year. Sales rose marginally to 91.36 LMT, while imports increased substantially by 39.6% to 60.16 LMT, highlighting Indias continued dependence on external sources for phosphatic fertilizers.

Production of complex fertilizers (NP/NPK) recorded strong growth, increasing by over 13% during the year. Imports of these fertilizers more than doubled, supporting e orts to ensure balanced nutrient availability. Single Super Phosphate (SSP) production and sales also remained stable. Potash fertilizers continued to be almost entirely import-dependent. India remains almost entirely dependent on imports for MOP from countries such as Canada, Russia, Jordan and Israel.

Indias total fertilizer imports during FY 2025 26 are estimated at approximately 22.3 million tonnes, signi cantly higher than the previous years 15.8 million tonnes.

Urea imports were estimated at around 10 million tonnes, while imports of non-urea fertilizers reached approximately 12.3 million tonnes. Rising consumption, limited domestic production growth and availability of phosphatic and potassic fertilizers, and the need to maintain adequate inventories were the primary reasons for higher imports. India also diversi ed its sourcing strategy to reduce supply risks arising from global market uncertainties.

Imports rose despite adequate domestic capacity due to:

Better than normal monsoon increased fertilizer consumption.

Domestic production growth was limited.

DAP supply remained constrained globally.

Government ensured adequate availability by importing aggressively.

Strategic stock-building before Kharif and Rabi seasons.

Promotion of Nano Fertilizers:

The Government continued to promote nano fertilizers as part of its strategy to improve nutrient-use e ciency. During April 2025 January 2026, sales reached 182.50 lakh bottles of Nano Urea and 144.93 lakh bottles of Nano DAP, indicating growing farmer acceptance. Over the long term, nano fertilizers may partially reduce conventional fertilizer demand growth and import requirements.

Fertilizer Sales and Consumption:

Fertilizer sales remained robust throughout the year, re ecting strong agricultural activity. Urea consumption was estimated at about 44.4 million tonnes, signi cantly higher than the previous years level. Consumption of phosphatic and potassic fertilizers also increased, supported by favourable weather conditions and expansion in cultivated area. Sales of complex fertilizers remained stable, while SSP recorded healthy growth. The increase in fertilizer use contributed to improved crop productivity and supported record food grain production estimates during the year.

Domestic fertilizer demand remained robust, supported by favourable monsoon conditions.

Indias fertilizer imports increased signi cantly to ensure uninterrupted supply.

Urea continued to be the most consumed fertilizer, creating opportunities for domestic producers.

Dependence on imported DAP and MOP remains a structural challenge.

Government policies promoting self-reliance, nano fertilizers and balanced nutrient usage are expected to in uence future demand patterns.

Domestic producers are strategically positioned to bene t from sustained demand growth and the Governments emphasis on fertilizer security.

E ect of Middle East Geopolitical crisis on Indian Fertilizer Industry during 2025-26:

During FY 2025-26, geopolitical tensions in the Middle East created signi cant uncertainty in global fertilizer and energy markets. The disruption a ected international prices of natural gas, ammonia, urea and phosphatic fertilizers, while also increasing freight and logistics costs. Given Indias dependence on imported LNG, ammonia, phosphoric acid and fertilizers, the industry faced supply-chain challenges and cost pressures. However, proactive measures by the Government of India, including strategic inventory build-up, timely imports and prioritization of gas supplies to fertilizer manufacturers, helped ensure adequate fertilizer availability during the year. The developments further underscored the importance of enhancing domestic manufacturing capabilities, diversifying sourcing arrangements and pursuing long-term self-reliance in critical fertilizer inputs.

Segment Analysis:

Based on use of fertilizer products, Urea sub-segment is the most dominant, followed by Complex fertilizers & DAP. Urea is the most commonly used fertilizer since it is less expensive than the other fertilizers. Excessive Urea use degrades soil fertility, resulting in increased sales of DAP and other complex fertilizers.

Growth of fertilizer industry in India:

The Government of India introduced the New Investment Policy (NIP)-2012 to encourage fresh investments and capacity expansion in the urea sector, thereby strengthening domestic fertilizer production and reducing dependence on imports. The policy has facilitated signi cant investments by both public and private sector enterprises, leading to modernization, revival of closed units and establishment of new capacities.

Recently Six New Urea Units including 4 PSU Joint Venture Units and 2 Private sector units Commissioned with 76.2 LMTPA capacity addition. Indigenous urea capacity increased from 207.54 LMTPA (2014-15) to 283.74 LMTPA (2023-24).

As of FY 2025-26, Indias fertilizer manufacturing industry comprises 36 large-scale gas-based urea plants, 21 units producing Di-Ammonium Phosphate (DAP) and complex fertilizers, and 2 units producing Ammonium Sulphate as a by-product. The commissioning of new and revived urea plants over the past decade has substantially enhanced indigenous urea production capacity, contributing to improved self-su ciency and ensuring timely availability of fertilizers to the agricultural sector.

The industrys growth continues to be supported by favourable government policies, subsidy mechanisms, energy-e ciency initiatives and adoption of innovative products such as Nano Urea and Nano DAP. However, the sector remains dependent on imports for phosphatic and potassic fertilizers and their raw materials, making global commodity prices and supply-chain dynamics important determinants of industry performance.

Under the Nutrient Based Subsidy (NBS) Scheme,

P&K fertilizers are covered under Open General License (OGL), allowing companies, the exibility to import or manufacture fertilizers based on market dynamics.

To promote domestic production and achieve self-reliance in the fertilizer sector, the Government has recognized new manufacturing units and expansions of existing capacities under the NBS Scheme.

The number of fertilizer grades covered has increased from 22 in 2021 to 28 at present.

Additionally, freight subsidy on Single Super Phosphate (SSP), an indigenously produced fertilizer, has been implemented since Kharif 2022 to promote its usage and enhance phosphatic nutrient availability in the soil.

Subsidy expenditure on fertilizers in India during FY 2025-26:

The fertilizer sector continued to receive substantial policy support from the Government of India during FY 2025-26. For FY 2025-26, the Union Budget initially provided a fertilizer subsidy allocation of about 1.67 1.68 lakh crore. This was lower than the revised estimate of about 1.71 lakh crore for FY 2024-25. However, during FY 2025-26, the Government sought additional funds for fertilizer subsidies including support for imported urea and other fertilizers. As a result, the Revised Estimate (RE) for FY 2025-26 fertilizer subsidy increased to approximately 1,86,460 crore ( 1.86 lakh crore) , comprising:

Urea subsidy: approximately 1.16 lakh crore

Non-urea (P&K) subsidy: approximately 0.54 lakh crore

Balance towards other fertilizer-related support and adjustments

The continued subsidy support ensured a ordability of fertilizers to farmers, maintained demand stability and supported the nancial sustainability of fertilizer manufacturers.

Indian Fertilizer Market Dynamics:

Food demand is expected to rise sharply over the next ve years, owing to the countrys rapid population increase. Conversely, as urbanization levels rise, accessible arable land is anticipated to decline. Fertilizers are expected to play a signi cant in uence in raising average agricultural yields per hectare. Despite great historical growth, Indias fertilizer use is still extremely imbalanced. There are now a handful of states in India with very low fertilizer penetration. This o ers plenty of room for planned growth. Rising rural incomes, combined with easy nancing availability, are also expected to have a favourable impact on fertilizer usage in the country. Contract farming, in which the food processor (contractor) is supposed to give inputs in the form of technology and training to the farmer is also projected to have a good impact on fertilizer usage. Fate of fertilizer industry is intimately related to agriculture sector of the country. The performance of the agriculture sector has been very promising so far. The latest budget has measures to make it future-ready. It is very essential that in addition to ensuring food security of this vast nation, agriculture sector becomes sustainable and more remunerative to our farmers. Fertilizer industry will continue to play its role and help in greening the Indian agriculture.

Future of Indian Fertilizer Market:

The geopolitical con ict in Middle East posed serious challenges to supply of adequate quantity of fertilizers to the farmers. The central government acted very proactively to facilitate both production and import of fertilizers. Government facilitated various agreements with foreign companies to supply of raw materials and fertilizers both for Phosphatic and Potassic fertilizers. But more importantly, allocation for fertilizers subsidy to insulate the farmers from high prices. Allocation of fertilizer subsidy and hence practically no increase in farmers prices, ensured that fertilizer consumption and hence agriculture production were not a ected in spite of all round negative impact on other sectors of the economy.

The focus should now shift to make Indian agriculture more productive, reducing its impact on environment and also reducing carbon footprint of fertilizer production. Nitrogen is the primary nutrient most used in agriculture. But its use e ciency remains poor in India which is in the range of 30-40%. The rest escapes to environment (water and air) contributing to greenhouse gases in atmosphere. E orts to be made to increase Nitrogen e ciency in coming years by use of better fertilizer products like Nano urea, Sulphur Coated Urea and other high e ciency products. It is important that integrated nutrient management which includes use of su cient micronutrients and organics is adopted. Adoption of better agriculture systems like precision and protected farming can also help to improve fertilizer use e ciency. This will reduce the nitrogen requirement in the soil signi cantly. Further, there is need for increase in use of bio-fertilizers which will help to x more nitrogen per annum from atmosphere. On the production front, at least part of nitrogenous fertilizers can be produced with green hydrogen/ ammonia, thus reducing use of fossil fuels. Improvement in nitrogen use e ciency will reduce cost of cultivation, reduce fertilizer subsidy and increase income of farmers. These measures will also reduce our dependence on imported natural gas.

E ciency level of present fertilizer plants in the country is very high and comparable to best plants in the world. Therefore, there is little scope for further improvement of energy e ciency of existing fertilizer plants and hence reduction in carbon dioxide emission. Further, improvement through plant modi cations will be very small. In phosphate and potash, India is almost completely dependent on imports. India imports basic raw materials like sulphur and phosphate rock, intermediates like phosphoric acid, ammonia and sulphuric acid and nished products like DAP, Complex fertilizers, Muriate of Potash (MOP) and Sulphate of Potash (SOP). There are challenges both on availability and price fronts. Events of last few years have increased these challenges. To address these challenges, India has adopted multi-pronged strategy like opening of joint ventures abroad for production of phosphoric acid. Government also facilitated for several agreements between Indian and foreign companies for supply of fertilizers and fertilizer raw materials. But the capacity of phosphoric acid plants in India is not fully utilized due to lack of availability of su cient quantity of phosphate rock and unfair competition from imports. There is need for investment in phosphate rock mines abroad. In case of potash, we face even more serious challenge in recent times due to non-availability of su cient quantities of MOP in world markets. Investment in potash mines to increase potash-mining capacity and secure supplies is required.

The Indian fertilizer industry is expected to maintain a steady growth trajectory over the medium to long term, supported by rising agricultural demand, government policy support, increasing adoption of specialty and nano fertilizers and ongoing e orts towards self-reliance in fertilizer production. While import dependence for phosphatic and potassic nutrients is likely to continue, investments in domestic manufacturing, technological innovation, digital agriculture and sustainable nutrient management are expected to create signi cant growth opportunities. The industrys outlook remains positive with sustained demand from the agriculture sector and increasing focus on balanced fertilization and soil health management.

The Indian fertilizer market is expected to grow at 3 4% annually over the next ve years, with the strongest growth likely in nano fertilizers, bio-fertilizers, micronutrients and specialty nutrient products.

Global Fertilizer Outlook (2026 and Beyond)

The global fertilizer industry is expected to maintain moderate long-term growth, driven by increasing food demand, population growth and the need to improve crop yields. However, the near-term outlook is characterized by price volatility, geopolitical risks and supply-chain uncertainties.

The global fertilizers market size was estimated at USD 227.0 billion in 2025 and is projected to reach USD

283.6 billion by 2033, growing at a CAGR of 2.7% from 2026 to 2033. Global population growth and rising protein consumption are intensifying the need for higher agricultural output.

Fertilizers play a key role in maximizing crop yields from limited arable land. This structural demand ensures consistent growth for the global fertilizers industry. Large-scale commercial farming is expanding rapidly, especially in Asia, Latin America and Africa. Farmers are increasing fertilizer use to secure predictable yields, improve crop quality and shorten production cycles. Government support and better access to farm credit further boost fertilizer consumption.

Environmental concerns and e ciency requirements are driving demand for controlled-release, water-soluble and bio-based fertilizers. These products reduce nutrient losses, enhance crop uptake and comply with stricter regulations. As sustainability becomes a key focus, premium fertilizers o er signi cant growth potential.

Market characteristics include high capital intensity, dependence on raw materials like natural gas and phosphate rock and sensitivity to global agricultural cycles. Innovation in specialty and sustainable fertilizers, along with regulatory compliance, increasingly di erentiates market players and drives strategic partnerships across regions.

Nitrogenous fertilizers dominated the global market with the highest revenue share of more than 38% in 2025. Rising global food demand and the need for high-yield crops continue to drive strong consumption of nitrogen-based fertilizers. Their cost-e ectiveness and critical role in enhancing staple crop productivity keep this segment as the largest contributor to the global market.

Micro-nutrients are the fastest growing segment with a projected CAGR of 6.6% from 2026 to 2033. Increasing focus on soil health, crop quality and precision farming is accelerating demand for micro-nutrient fertilizers. These high-value products address speci c nutrient de ciencies, supporting premium yields and sustainable farming practices, fuelling rapid market growth.

Cereals and grains dominated the market with the highest revenue share of 42.5% in 2025. High global consumption of cereals and grains drives consistent fertilizer demand, particularly nitrogen and phosphorus-based products. Their critical role in staple crop productivity ensures this segment remains the largest contributor to the global fertilizers market.

Oil seeds & pulses are growing signi cantly with a projected CAGR of 2.7% 2026 to 2033. Rising demand for plant-based oils and protein-rich pulses is boosting fertilizer consumption in this segment. Targeted nutrient application and increased cultivation in emerging markets are fuelling rapid growth and higher adoption of specialty fertilizers.

Regional Insights

Asia Paci c fertilizers market dominated with the highest revenue share of 48.1% in 2025, driven by rising population, expanding commercial agriculture and high crop intensity in major markets like India and China. China remains the top global fertilizer consumer, driven by intensive cereal farming and high food demand from its vast population. Growing adoption of precision farming and modern nutrient management practices is enhancing yield e ciency and fertilizer uptake.

Fertilizer Industry Structure & Developments in India

Fertilizer industry in India operates in public, private and co-operative sector, with the private sector occupying a larger share in the manufacturing capacity. Fertilizers sector being highly energy & capital intensive, cost of fertilizers is unavoidably high. In order to ensure availability of fertilizers to the majority of the small & marginal farmers at a ordable prices, this sector is highly regulated and controlled by GoI for pricing and distribution of fertilizers. At present, Urea prices are highly subsidized and administered under New Urea Policy (NUP) 2015 whereas P & K Fertilizers are partially decontrolled and subsidy is disbursed based on the nutrient content available in the particular fertilizer under Nutrient Based Subsidy introduced by GoI w.e.f. 01.04.2010. In case of Urea, MRP is xed by GoI and is highly inadequate in respect of current cost of production / imported price. The introduction of pooling of gas mechanism in the year 2015-16 has been consistently helping ensuring delivery of gas at uniform and lower price to Fertilizer companies to enable them to make Urea production beyond re-assessed capacity and helping to contain the requirement of working capital to some extent. Government of India increased xed cost by 350 per tonne of Urea. However, Government is yet to consider the issue of minimum xed cost of 2,300 per tonne of Urea as very low xed cost for some of the Urea Units including Vijaipur-I Unit of the company is a ecting their viability. Tightening of energy norms under New Urea Policy (NUP) 2015 has also a ected the pro tability of Urea manufacturing units.

The imbalanced use of fertilizers due to highly subsidized Urea continues to be a big challenge and needs to be addressed on priority. On this front, GoI has been distributing Soil health cards to all the farmers to enable them to get information about nutrients level in the soil to make judicious use of fertilizers through soil and seed testing facilities at retail outlets of fertilizer companies. Fertilizer companies have been marketing city compost and organizing awareness programs for the farmers to boost the use of city compost to improve soil quality and increase yield of crop in line with a policy of the government on city compost under the Swachh Bharat Abhiyan. Implementation of DBT which has aggravated the problem of working capital due to change of subsidy payment from supply to sale and lack of availability of domestic gas, increasing trend in the price of RLNG etc. adversely impacting the pro tability of the Urea manufacturers.

The response of fertilizer use to food grain productivity has been declining over the years due to multi nutrient de ciencies cropping up in the soil. Apart from de ciencies of primary nutrients, widespread de ciencies of secondary and micro-nutrients are a ecting the soil health. To restore soil health for desired growth in agriculture, balanced and integrated use of various nutrients is required. To address the issue, there is ample opportunity to the industry to introduce many new products containing combination of various nutrients including primary, secondary and micro-nutrients. The use of Water Soluble Fertilizers, Potash Derived from Molasses (PDM) and Fermented Organic Manure (FOM) in the country is also on the rise to improve fertilizer use e ciency of soil health. Country is also manufacturing Nano Urea. There are currently nine Nano Urea plants operating in the country. Nano Urea is a nano-technology based revolutionary Agri-input which provides nitrogen to plants. Further, Country is also having 4 Nano DAP production units. The fertilizer industry is highly vulnerable to the adverse climatic conditions which badly impact the fertilizer industry.

Strength and Weakness

Strengths:

Large player in domestic Urea Production

A multi-product Company with well established "Kisan" Brand except for subsidized fertilizers.

Majority equity held by GoI

Pan India distribution and sales network.

Three plants located in the most intensive fertilizers consuming States i.e. Punjab and Haryana.

Manufacturing Facilities for Industrial Products.

Skilled & Experienced workforce.

Adequate Infrastructure for future expansion/sharing.

Well established eco-system for Seed Production & Sale.

Strong presence in the Southern market after commissioning of RFCL.

Weaknesses:

Low operating margins in Urea due to regulatory environment.

Increase in working capital requirement after implementation of DBT.

Bathinda, Nangal and Panipat being old & smaller capacity plants consuming higher energy than new & large capacity plants.

Dependence on subsidy.

Opportunities & Threats

Opportunities:

Leverage of existing Pan India marketing network for undertaking trading and other businesses.

Increased capacity utilization of Nitric Acid & Ammonium Nitrate Plants at Nangal.

Customized, Forti ed, Water Soluble & Liquid Fertilizers for balanced fertilization.

Manufacturing of Agro Chemicals.

Increase in trading of other Agri Products (PDM, FOM, Seaweed Granules etc.)

Threats:

Increased Government regulations & procedures.

Tightening of energy norms of urea plants under New Urea Policy (NUP) 2015.

Adverse demand supply scenario of Fertilizers due to adverse agro Climatic condition.

Volatility in prices of imported fertilizers and industrial products.

Decontrol of Urea.

Revenue

The Company has achieved Revenue from Operations of 21,514.18 crore during 2025-26 as against 19,794.50 crore during previous year and total income of 21,567.86 crore during 2025-26 as against 19,889.52 crore during previous year as detailed below:

( in crore)

Particulars	2025-26	2024-25	Change
Sale of products (including subsidy)	21230.67	19532.86	1697.81
Sale of services	38.18	48.46	(10.28)
Other Operating revenue	245.33	213.18	32.15
Revenue from operations	21514.18	19794.50	1719.68
Other income	53.68	95.02	(41.34)
Total Revenue	21567.86	19889.52	1678.34

Urea and other fertilizers

Your Company has registered Urea production of 36.41 LMT with an overall capacity utilization of 112.69 % during 2025-26 against 37.14 LMT achieved during 2024-25 (CPLY). Company achieved Bentonite Sulphur production of 20,035 MT against CPLY of 18,051 MT having a growth of around 11%.

On the sales front, the Company has sale of Fertilizers of 65.20 LMT that includes sale of 36.46 LMT of own Urea, 9.24 LMT of Imported Urea, 8.75 LMT of RFCL Urea, 10.75 LMT of Non-Urea Fertilizers including 0.24 LMT (23857 MT) of Compost during 2025-26 as compared to 63.37 LMT during 2024-25 which includes sale of 37.32 LMT of own Urea, 4.18 LMT of Imported Urea, 11.99 LMT of RFCL Urea, 9.88 LMT of Non-Urea Fertilizers including 0.26 LMT (26466 MT) of Compost.

The detailed quantity of break-up of sale of urea and other Fertilizers is as under:

(In LMT)

Particulars	2025-26	2024-25	Change
1. Manufactured
a) Urea	36.46	37.32	(0.86)
b) Bentonite Sulphur & Bio-Ferlizers	0.21	0.20	0.01
2. Traded Goods
a) Imported	9.01	8.51	0.50
b) Indigenous	19.52	17.34	2.18
Total Fertilizers	65.20	63.37	1.83

Industrial Products

The Company registered sale of Nitric Acid of 91,372 MT during 2025-26 as compared to previous sale of 99,745 MT during 2024-25. The Company also recorded sale of Ammonium Nitrate to the tune of 46,868 MT during 2025-26 as compared to sale of 55,502 MT achieved during 2024-25.

In terms of revenue generation from production and sale of Industrial products, the Company achieved sale of Industrial-Products (IP) comprising of Nitric Acid, Sodium Nitrate etc. to the tune of 533.83 crore during 2025-26 against CPLY of 588.64 crore during 2024-25.

Bio-Fertilizers

The Company sold 690 MT of Bio-Fertilizers (Solid & Liquid) to the tune of 2.60 crore in FY 2025-26 as against 554 MT of 2.08 crore during CPLY.

Import & sale of Fertilizers

The Company sold 9.01 LMT of imported non-Urea Fertilizers including DAP, MoP, APS, NPK etc. worth 6,388.01 crore during 2025-26 against 8.51 LMT worth 4,524.95 crore during 2024-25.

Apart from the above, NFL also sold 9.24 LMT of Urea imported in Government Account in FY 2025-26 against 4.18 LMT during 2024-25.

Domestic Trading of Agro Products

The Company has registered total revenue of 245.23 crore towards trading of various agro products such as seeds, pesticides & compost and RFCL ammonia during the year against 145.30 crore during CPLY.

Gross Sale Composition

	% of total Sale Composition
Item	2025-26	2024-25	% Increase/(Decrease)
a) Urea (manufactured)	59.66	67.41	(11.50)
b) Other Products	40.34	32.59	23.78

Owing to progressive shift in strategy of the Company, the composition of gross sale of the Company has undergone visible change. Against the Urea (main product) contribution of 94.49% in the overall revenue of the Company during 2015-16, Urea (manufactured) contribution has reduced to 59.66% while contribution of other product has increased to 40.34% during 2025-26. Percentage of total sale composition of other products during the year has increased to 40.34% as compared to 32.59% during 2024-25.

Projects completed / underway

The status of the NFLs ongoing projects is as under:

Setting up of manufacturing facilities for Agro-chemicals at Bathinda

NFL has set up Agro-chemical plant at Bathinda Unit at an approximate cost of 12.57 crore. Out of ve trains, production has been commenced from three trains. Remaining one train is under recti cation for capacity utilization and other train is under completion by contractor and expected to be completed shortly.

Setting up of Roof Top grid connected Solar PV power plant at NFL Units

NFL is installing 1500 kWp grid-connected rooftop Solar PV Power Plant at its Panipat Unit under MNRE noti cation dated 11.05.2024. The total capex of project is 6.67 crore (including GST). The project was scheduled to be completed by December, 2025. However, it has been delayed and is now expected to be completed by August, 2026.

NFL is also planning to set up Roof top Solar PV power plants at its Nangal, Bathinda and Vijaipur with tentative installed capacities of 1735 kWp, 600 kWp and 1220 kWp respectively.

Setting up of Sulphur Coated Urea (Urea Gold) pilot plants at Panipat and Nangal Unit

NFL has set up 5000 MTPA Urea Gold plant at Panipat & Nangal Unit under R&D with a total Capital Expenditure (CAPEX) of 3.43 crore & 6.52 crore (including GST) for Panipat & Nangal Units respectively.

As projects were executed under R&D, the desired results were not achieved. Certain modi cations are being carried out at Nangal unit for achieving desired quality whereas Panipat equipment has been planned for use at Nangal Unit as spares.

In continuation of the direction of Department of Fertilizers (DoF), NFL is planning to set up 250 MTPD & 300 MTPD Sulphur Coated Urea plants at Nangal & Vijaipur Units respectively. M/s PDIL is being lined up as Project Management Consultant (PMC).

Setting up of a new brown eld Ammonia-Urea complex of Namrup-IV fertilizer plant at Namrup, Assam

NFL along with Government of Assam (GoA), OIL, HURL and BVFCL has formed a Joint Venture Company (JVC) named Assam Valley Fertilizer and Chemical Company Limited (AVFCCL) on 25.07.2025 for setting up of a new brown eld Ammonia-Urea complex of Namrup-IV fertilizer plant at Namrup, Assam. The shareholding in JVC is as Government of Assam 40%, NFL 18%, OIL 18%, HURL 13% and BVFCL 11%. The tentative overall time schedule for mechanical completion and commissioning of Project is 48 months. Tentative CAPEX required for the project is 10601.40 crore and NFL equity contribution shall be around 572.45 crore against shareholding of 18%. Annual Urea production capacity of the plant shall be 12.7 LMT.

Setting up Bentonite Sulphur (BS) plant at Vijaipur Unit

NFL is planning to set up a 25,000 MTPA Bentonite Sulphur (BS) plant at its Vijaipur Unit. The estimated project implementation period is about 14 months.

Setting up Joint venture Plant at Russia

NFL along with RCF & IPL has signed a MoU with M/s Uralchem JSC Russia for setting up of facility for production of 2 Million MT of Urea at Russia. Subsequent a MoU has been signed between Indian Consortium members for lining up M/s PDIL for preparation of Feasibility Report for setting up of Urea Plant in Russia under Joint Venture Company consisting of M/s Uralchem JSC and Indian Consortium Team. M/s PDIL has been lined up for preparing feasibility report.

Integrated Energy Saving Projects

Government of India (GoI) noti ed New Urea Policy (NUP)-2015 setting the Target Energy Norms (TEN) for di erent fertilizer units. Accordingly, TEN for Nangal, Bathinda and Panipat was 6.5 Gcal/MT of Urea and for Vijaipur-I & II, it was 5.5 Gcal/MT.

Although the above norms were implemented from April 2018, but owing to delayed execution of energy saving schemes at various units across industry, GoI revised the TEN multiple times in response to representations from industry players for softening of the norms. For Vijaipur-II, TEN of 5.5 Gcal/MT of Urea as in NUP-2015 or until the TEN was achieved, whichever is earlier. TEN of 6.5 Gcal/MT of Urea under NUP-2015 for Bathinda, Panipat and

Nangal was applicable from 1 October, 2022, however, the TEN for Vijaipur-I was extended with penalty.

Subsequently, vide Letter Dated 15.04.2024, the norm for Vijaipur-I was extended upto 31 December, 2024, with a 35% penalty and further extended vide letter dated 13.03.2026 with 35% penalty of the di erence between their revised energy norms and tentative energy norms under NUP-2025 for a period upto 31.03.2025 or till NFL Vijaipur-I achieves TEN, whichever is earlier. DoF vide its noti cation dated 30.06.2026 has revised the New Energy Norms applicable w.e.f. 01.04.2025 to 31.03.2028.

Gas Turbine Generators (GTGs) along with Heat Recovery Steam Generation (HRSGs) were installed at Bathinda, Nangal and Panipat Unit to bring down the overall energy consumption below TEN speci ed under NUP-2015 which commenced commercial operation at Bathinda and Nangal in May 2021 and at Panipat in January 2022.

Likewise, various energy saving schemes for Vijaipur I & II were carried out and got completed in March 2022.

Furthermore, M/s Topsoe was engaged to explore additional schemes for reducing energy consumption at Nangal, Bathinda and Panipat and submitted the study report recommending energy reduction schemes in the backend section of each units ammonia plant. Upon execution, these schemes are expected to collectively decrease energy usage by 0.15 0.25 Gcal/MT of urea at each unit.

Energy schemes recommended by Topsoe shall be implemented in phase-wise manner. In the rst phase, revamp of the synthesis gas compressor and its steam turbine drive is being carried out at Nangal, Bathinda and Panipat Units.

Like above, M/s Saipem has carried out the study for energy improvement and submitted the energy reduction schemes for Urea plant at Vijaipur-I&II units which are yet to be implemented. Upon implementation of selected energy reduction schemes, energy consumption is expected to decrease by 0.123 Gcal/MT of urea for Vijiaipur-I and 0.072 Gcal/MT of urea for Vijaipur-II.

Industrial Safety, Ecology & Pollution Control

The Company is committed to achieving excellence in safeguarding the occupational and personal health of its employees by minimizing health hazards and providing state of the art healthcare facilities. All units are equipped with modern hospitals and employees have access to specialized medical services as required. Regular periodic medical examinations are also conducted to ensure continuous health monitoring.

The Company maintains a strong focus on achieving sustained energy-e cient operations across its manufacturing units while ensuring a pollution-free environment and adherence to process safety standards. All manufacturing units are certi ed for ISO 9001 (Quality Management), ISO 14001 (Environmental Management), ISO 45001:2018 (Occupational Health and Safety Management) and ISO 50001:2018 (Energy Management) underscoring its steadfast commitment to quality, environment, safety and energy.

To ensure compliance with environmental standards, all units are having online monitoring systems for e uent and emission discharges, which are integrated with the Central and State Pollution Control Boards.

Health and Safety Committees have been constituted at each unit and quarterly review meetings are regularly conducted to address the related issues. Initiatives such as Total Quality Management (TQM) and Hazard and Operability Studies (HAZOP) have been implemented to enhance process safety.

To e ectively handle emergencies such as re, explosion or toxic gas releases, comprehensive On-site Emergency Disaster Plans and O -site Emergency Plans are in place. These plans are designed to train employees to respond e ciently and con dently during emergencies, thereby minimizing damage to personnel and assets. The e ectiveness of these plans is ensured through surprise mock drills, the performance of which is thoroughly evaluated and improved upon. Regular inspections and visits by local authorities and national agencies including the National Disaster Management Authority, help to ensure continued alignment with the best safety practices.

Each unit also has a Disaster Management Quick Response Team to address the o -site emergencies, particularly those involving the transportation of hazardous substances like liquid ammonia and chlorine gas.

As part of its commitment to ecological sustainability, the Company has actively pursued a orestation across all units. A total of 10,000 tree saplings were planted in and around various units during FY 2025-26 for cleaner and greener earth for future generation. The cumulative plantation since commencement is about 9.05 lakhs for all the units.

To increase the sub soil water level, all the units have installed Rain Water Harvesting system. This measure has helped in conservation of water, increase in underground water table and increase greenery in the surroundings.

A 1.5 MW capacity solar power plant is under installation at our Panipat unit. Once commissioned, it will contribute in providing greener power along with reduction in the units carbon footprint.

Furthermore, to minimize ecological impact, especially plastic pollution, the organization undertakes several initiatives. These include banning of single-use plastics within its premises, promoting minimal plastic usage and managing approximately 16,000 metric tons of plastic waste annually to ful l organization EPR (Extended Producer Responsibility) obligation under Plastic Waste Management Rule, 2016 (as amended from time to time). This waste is collected and either recycled or properly disposed of through authorized waste management agencies.

Outlook

The company is envisaging the growth in its top & bottom line by adopting various business strategies as under:

Maximization of Urea production in energy e cient manner.

Maximization of production of Bentonite Sulphur & Bio-fertilizers.

Maximization of production of Industrial Products including Ammonium Nitrate / Nitric Acid.

Production of new products like Sulphur Coated Urea, Agro-Chemicals.

Import and sale of fertilizers like Urea, DAP, MoP, Complex fertilizers, Water Soluble Fertilizer including Calcium Nitrate.

Marketing of Urea manufactured by RFCL.

Domestic trading of Agro products (Pesticides, Weedicides etc.), Compost, Water Soluble Fertilizers, Calcium Nitrate, SSP, PDM, FOM etc.

Dividend from RFCL.

Equity participation in the fertilizer companies domestic and abroad.

Rationalization of manpower.

Recruitment of manpower to meet the short fall arising out of massive retirements and future growth of the company.

Risk & Concerns

The major risk & concerns of company are outlined below:

Low operating margins in Urea due to tight regulations.

Strict Energy Norms for all the plants under New Urea policy (NUP)-2015 and further review of energy norms.

Natural Gas supply constraints due to geopolitical factors.

Deletion of provision of minimum xed cost retrospectively w.e.f. 02.04.2014 for Vijaipur-I.

Dependence on subsidy. Delay in receipt of subsidy leads to higher interest cost.

Lack of Internal resources (funds) for future investment.

Bathinda, Nangal and Panipat being old plants consuming higher energy than new and large capacity plants.

Environmental Protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange Conservation

Disclosure in terms of the Companies (Account) Rules, 2014 in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Outgo is appended as Annexure-6 forms part of the Board Report.

Company has undertaken various initiatives for adopting best practices for health, safety environment management and sustainable developments and the details of the same is appended as Annexure-7 forms part of the Board Report.

Corporate Social Responsibility

A detailed report on the Corporate Social Responsibility is appended as Annexure-5 forms part of the Board Report.

Risk Management Policy

The chemical fertilizer industry is operated in a hazardous environment and faces many risks including those related to health, safety and environment in addition to general business & nancial risks. In order to mitigate them, the company has a comprehensive Risk Management Policy which is regularly reviewed and a periodical review of the risks, procedures and strategies is undertaken.

To review the new risks evolved during the quarter along with mitigation action undertaken as well as anticipated risks along with mitigation actions planned in future, the company has a two tier system where quarterly risks report is rst reviewed by the Risk Assessment Committee (RAC) and thereafter nal report is submitted to Risk Management Committee (RMC) for its recommendations before submission to Audit Committee and the Board of Directors. E orts are made in a planned way to obviate the risks either fully or to minimize their impact.

Under Risk Management policy, all the risks along with mitigation actions undertaken have been reviewed by Risk Assessment and Risk Management Committees. Some of the major risk having severe nancial impact as identi ed by the company include implementation of Target Energy Norms under NUP-2015 which resulted in reduction in pro t margin mainly at Vijaipur-I unit & RLNG/NG supply constraints due to geopolitical factors and its impact on production.

Internal Control Systems and their adequacy

The Company has a sound system of internal controls that ensures compliance with statutory requirements, regulations and implementation of various policies and guidelines. Besides Statutory Audit by C&AG, regular and exhaustive internal audits are conducted by independent chartered accountant rms in close co-ordination with NFLs Internal Audit Division to examine, evaluate, monitor and report on adequacy and e ectiveness of the system of checks and balances is in place, compliance with policies, plans and statutory requirements to protect its resources against waste, fraud and in-e ciency and to ensure accuracy and reliability in accounting and operating data.

The policies and guidelines are in the form of various codes, manuals and procedures, issued by the management covering all critical and important activities viz. Budget, Purchase, Material, Stores, Works, Finance, Human Resources etc. Internal Audit Program is approved by Audit Committee of Directors and is conducted as per Accounting Standards and these codes, manuals, procedures, etc. that are updated from time to time. The observations/recommendations made by the auditing agencies are reported to the Audit Committee of Directors along with a report of compliance of directions issued in the past. The quarterly nancial statements are reviewed by the Audit Committee of Directors before they are submitted to Board of Directors.

The Company has a well-de ned Delegation of Powers in place, which lays down the powers for di erent managerial levels to facilitate faster decision making. The various policies, procedures and guidelines are continuously reviewed to improve e ectiveness of the systems.

The Company has a full- edged Vigilance Division to oversee that the guidelines of the Government and the rules/procedures of the company are strictly adhered/ implemented in all matters. The Vigilance Division conducts regular inspection of various activities in Manufacturing Units, Zonal O ces and other O ces for taking corrective/preventive action.

Internal Financial Controls and its e ectiveness

The Company has in all material respects, an adequate internal nancial controls system over nancial reporting and such internal nancial controls over nancial reporting were operating e ectively as at 31.03.2026.

Financial Performance

During the year, Company achieved revenue from operations of 21,514.18 crore (including subsidy of 15,036.16 crore) compared to 19,794.50 crore of CPLY (including subsidy of 13685.10 crore). The sales turnover is mainly increase due to increase in sale of traded fertilizers and increase in the subsidy of P&K fertilizers.

During the year, company achieved the Pro t before Tax of 232.67 crore as against Pro t before Tax of 104.08 crore during CPLY. PBT has increased mainly due to increase in pro t from traded goods, higher receipt of past period subsidy arrears in current year.

Short term borrowings of the Company as at 31.03.2026 stood at 3,959.25 crore, including cash credit utilization, short term loans and working capital demand loan etc. as compared to 1995.77 crore as at 31.03.2025. The short term borrowings have increased by 1,963.48 crore as on 31.03.2026 as compared to CPLY mainly due to high cost of imported P&K fertilizers.

Analysis of the Financial Performance of the Company

a) Revenue from Operations

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Revenue from Operations	21514.18	19794.50	9

Reason for variation:

The sales turnover was increased mainly due to increase in sale of traded fertilizers and increase in the subsidy of P&K fertilizers.

b) Materials Consumed

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Materials Consumed	6782.00	7235.85	(6)

Reason for variation:

The decrease in materials consumed is mainly due to decrease in average price of gas to US $14.98 /MMBTU during current year as compared to US $ 16.39 /MMBTU during CPLY.

c) Finance Cost

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Finance Cost	249.33	225.79	10

d) Repairs & Maintenance

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Repairs and Maintenance	137.34	118.65	16

Reason for variation:

Repair and Maintenance has increased by 16% during 2025-26 as compared to CPLY.

e) Employees Bene ts

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Employee Remuneration & Bene ts	623.50	612.02	2

Reason for variation:

Employee Bene t Expenses has increased by 2% during 2025-26 as compared to CPLY

f) Power and Fuel

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Power and Fuel	4792.91	4872.24	(2)

Reason for variation:

Power and Fuel expenses have decreased by 2%.

g) Freight and Handling

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Freight and Handling	1053.87	935.70	13

Reason for variation:

Freight & Handling expenses have increased mainly due to higher dispatches.

h) Other Expenses

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Other Expenses	268.86	289.01	(7)

Reason for variation:

Other expenses have decreased mainly due to decrease in Advertisement, Publicity and Sales Promotion by 5.89 crores during 2025-26 and decrease in rent for Godown expense by 4.09 crore and decrease in Insurance expense by 4.92 crore.

i) Other Income

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Other income comprising of interest income and other non-operating income	53.68	95.02	(44)

Reason for variation:

Mainly on account decrease in rental income by 10.34 crore, Liquidated Damages recovered from Contractor / Supplier by 5.57 crore and pro t on sale of assets 12.20 crore.

Financial Status

a) Fixed Assets

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Tangible Assets	3494.46	3646.15	(4)
Intangible Assets	39.61	47.67	(17)
Capital work in progress	160.96	171.53	(6)
Intangible Assets under development	-	-	-
Total	3695.03	3865.35	(4)

Reason for variation:

The decrease was mainly on account of decrease in tangible assets by 151.69 crore, decrease in Capital work in progress assets by 10.57 crore and decrease in intangible assets by 8.06 crore.

b) Non-current Investment

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Investments (Net of Provisions)	501.74	491.48	2

Reason for variation:

The increase in investment is due to investment made by the company in Assam Valley Fertilizer & Chemical Company Limited (AVFCCL) a Joint Venture Company.

c) Inventories

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Raw Materials	7.13	11.27	(37)
Stores and Spares (Incl. packing material)	420.86	269.65	56
Semi- nished/ nished products (incl. traded)	634.50	606.11	5
Others (carbon slurry)	22.57	23.50	(4)
Total	1085.06	910.53	19

Reason for variation:

Inventories Increased mainly due to increase in closing stock of P&K fertilizers.

d) Trade Receivable

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Gross Debtors FICC	5198.89	3001.52	73
Others	262.54	319.13	(18)
Less: Provision for Doubtful Debts	(50.19)	(47.35)	6
Net Debtors	5411.24	3273.30	65

Reason for variation:

Trade Receivables have increased during 2025-26 mainly due to increase in subsidy receivable of manufactured fertilizers.

e) Current Assets Other Financial Assets

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Other Financial Assets	101.38	109.39	(7)

Reason for variation:

Other Financial Assets decreased mainly due to decrease in claim recoverable during the year 2025-26.

f) Current Liabilities

( in crore)

Particulars	FY 2025-26	FY 2024-25	Change (%)
Short Term Borrowings	3959.25	1995.77	98
Trade Payables	1478.73	1537.68	(4)
Other Financial Liabilities	1318.31	841.00	57
Provisions	182.97	147.88	24
Other Current Liabilities	201.69	174.71	15
Total	7140.95	4697.04	52

Reason for variation:

The current liabilities have increased during 2025-26 due to increase in short term Borrowings and other nancial Liabilities.

Human Resource Management

The Company considers its Human Resource as its most important asset and makes sustained e orts for the development of its manpower. Company has a well-established Human Resource Department to cater the training needs of employees, keeping in view the changing technology and overall business environment.

The Company has manpower strength of 2612 regular employees as on 31.03.2026, which comprises 1253 Executives and 1359 Non- Executives. 198 women employees are on its roll, which is 7.58 % of the total work force.

To improve skills and instill behavioral and personality development traits in all supervisory sta and managerial cadre, NFL organized number of training programmes (in-house as well as external) on contemporary subjects during the year. The training programmes were identi ed through Performance Management System by synchronizing organizational needs with individual needs. The Company also organized specially designed training programmes for developing women employees in various areas of expertise. In these diverse programmes, 12316 man-days training were imparted to employees and 1600 man-days training to women employees.

Employees participation in Management is an essential ingredient of industrial democracy, which implies mental and emotional involvement of employees in the management of enterprise. NFL always supported the participative culture in the management through consultative approach. The e orts to promote employees participation in various activities like Suggestion Scheme, Welfare, Safety, interactions between Management and employees representatives on various issues continued during the year. Industrial relations remained cordial during the year.

The industrial relations at all Units/ O ces of NFL during 2025-26 remained cordial.

Details of Signi cant changes in Key Financial Ratios

Details of Signi cant changes in Key Financial Ratios have been detailed in Note 62 of Financial Statement for FY 2025-26.

Cautionary Statement

Statements in the Management Discussions and Analysis describing the Companys focal objectives, expectations or anticipations may be forward looking statements within the meaning of applicable securities, laws and regulations that describe our objectives, plans or goals. All these forward looking statements are subject to certain risks and uncertainties, including but not limited to Government action, economic development and risks.

Registered O ce:	For and on behalf of the Board of Directors
Scope Complex, Core-III,
7, Institutional Area, Lodhi Road, New Delhi-110003.
Date: 20 August, 2026	(Dr. U. Saravanan)
	Chairman & Managing Director
	DIN: 07274628