Fertiliser stocks have continuously been trading higher despite the national lockdown as the sharp recovery in the rural market (tractors, fertilisers, agrochemicals).
Stocks like Coromandel International, Bayer Cropscience, Nagarjuna Fertilizers and Chemicals, Zuari Global and Rama Phosphates jumped up to 7 percent in trade on Wednesday.
In fact, most of these stocks surged over 70 percent since the national lockdown was announced. Coromandel International climbed 43 percent, Bayer Cropscience zoomed 73 percent, Zuari Agrochemicals surged 68 percent and others rose 10-40 percent.
Most the companies in their March quarter earnings reported healthy growth. Like Coromandel International's consolidated net profit surged 96 percent year-on-year to Rs 235 crore in March quarter of FY20. Meanwhile, Bayer's revenue jumped 82 percent YoY in Q4FY20.
Most analysts believe better rabi season, favourable sentiment and rise in demand has helped these stocks to outperform. In fact, April fared the best for fertiliser companies as their sales shot 47 percent.
Prabhudas Lilladher in its report said healthy underlying demand and low base is helping the industry to flourish.
"Coromandel's volume were up 194 percent, Gujarat State Fertilizers and Chemicals total volume rose 15 percent and Chambal's volume soared 69 percent due to robust demand, pre-buying and low base," the report said.