HYDERABAD — The June quarter is when India’s fertiliser sector earns its year. Kharif sowing runs from June through August, and the demand curve for urea, DAP, and complex fertilisers peaks sharply in those weeks. What Q1 FY27 revealed is a sector that caught that demand wave — but did not ride it uniformly.
Coromandel International posted the quarter’s standout result: revenue of approximately Rs 6,800 crore, up 17% year-on-year, with EBITDA margins near 13.5% and profit after tax of approximately Rs 640 crore. The Murugappa Group company has spent the last three years building a premium complex fertiliser and crop protection business that is less exposed to subsidy timing than pure urea players. In Q1 FY27, that positioning showed in the earnings quality rather than just the headline numbers.
| Company | Q1 FY27 Revenue (Rs Cr) | YoY Growth | PAT (Rs Cr) | EBITDA Margin |
|---|---|---|---|---|
| Coromandel International | ~6,800 | +17% | ~640 | ~13.5% |
| Chambal Fertilisers | ~4,100 | +9% | ~310 | ~11.8% |
| GNFC | ~1,950 | +12% | ~175 | ~14.2% |
| National Fertilizers | ~3,200 | +6% | ~120 | ~7.5% |
| RCF (Rashtriya Chemicals) | ~2,800 | +5% | ~85 | ~6.8% |
Chambal Fertilisers posted revenue of approximately Rs 4,100 crore, up 9%, with PAT near Rs 310 crore and EBITDA margins of about 11.8%. Chambal is primarily a urea manufacturer — its Gadepan plants in Rajasthan are among the most efficient in the country — and the urea subsidy cycle was orderly in Q1 FY27. The Department of Fertilizers released subsidy dues with less-than-usual lag, which helped working capital. What Chambal does not have is the non-urea diversification that Coromandel has systematically built; in a quarter where phosphatic complex fertilisers outperformed on volume, Chambal grew more slowly as a result.
Gujarat Narmada Valley Fertilizers & Chemicals — GNFC — had a stronger-than-expected quarter at Rs 1,950 crore of revenue, up 12%, driven by its chemicals segment rather than the fertiliser business. GNFC manufactures technical ammonium nitrate and formic acid alongside fertilisers, and both saw strong industrial demand in Q1 FY27. EBITDA margins at approximately 14.2% were the highest among the listed fertiliser companies, which reflects the chemicals contribution rather than fertiliser economics.
The PSU results tell a different story. National Fertilizers Limited posted revenue of roughly Rs 3,200 crore, up just 6%, with PAT near Rs 120 crore — thin margins of about 7.5%. Rashtriya Chemicals and Fertilizers followed a similar trajectory: Rs 2,800 crore in revenue, up 5%, with PAT of approximately Rs 85 crore. Both companies are primarily urea manufacturers whose economics are governed by the subsidy framework rather than by market pricing. The government controls the maximum retail price of urea, and the difference between production cost and MRP is paid as subsidy. When natural gas prices are high — as they were intermittently in FY26 — and subsidy disbursement is slow, the PSUs carry the cash gap on their balance sheets.
The monsoon variable is the one that the sector cannot control and cannot model with precision. As of late June 2026, the India Meteorological Department’s all-India cumulative rainfall data showed the kharif season tracking at approximately 4% above the long-period average, with particularly strong performance in the key agricultural states of Madhya Pradesh, Maharashtra, and Odisha. That translated into strong farmer demand for fertilisers, which drove the industry’s aggregate volumes. The India Fertilizer Association estimated DAP consumption in Q1 FY27 at approximately 3.1 million metric tonnes, up 11% from Q1 FY26. MOP consumption was roughly flat.
The phosphatic fertiliser market is where the international dimension matters. India imports essentially all of its DAP and MOP requirement; domestic phosphoric acid production covers only a fraction of the gap. In Q1 FY27, imported DAP landed at roughly $520 per tonne CIF India — down from $580 a year ago, on the back of softer Chinese export prices. That cost reduction flows through to either lower subsidy outgo or higher company margins, depending on the timing of subsidy rate revisions. The Department of Fertilizers had not revised the Nutrient Based Subsidy rates for phosphatic fertilisers as of the end of Q1, which meant companies were selling at rates set when input costs were higher — a temporary tailwind for margins.
The structural limitation on India’s fertiliser sector is not demand — India’s per-hectare fertiliser consumption remains below the global average despite decades of subsidised access. The limitation is supply: domestic urea capacity has been added in increments (HURL’s plants in Gorakhpur, Barauni, and Sindri came online between FY23 and FY25), but India still imports roughly 6-7 million tonnes of urea annually. That import dependence ties the sector to global urea prices and to the diplomatic relationship with export-oriented producers, primarily China, the UAE, and Russia.
For Coromandel in particular, the FY27 story is whether its crop protection business — pesticides, herbicides, fungicides — can sustain the kind of 20%-plus growth it delivered in FY26. Crop protection is less subsidy-dependent, higher-margin, and benefits from increasing farmer awareness of precision agriculture inputs. The company has been expanding its retail distribution network in Andhra Pradesh, Telangana, and Karnataka, with ambitions to be present in 80,000 villages by FY28. Whether that network density translates into sustainable revenue growth or simply higher selling costs is the question FY27 will begin to answer.
One dimension that the sector has yet to grapple with publicly is the government’s medium-term intention to reform the urea subsidy mechanism. Policy discussions have circulated around direct benefit transfer for fertilisers — routing subsidies to farmers rather than producers — for several years. In its current form, DBT for fertilisers exists in part: the PM-KISAN cash transfer scheme provides income support to farmers, and soil health cards are supposed to guide application rates. But a full-price reform, where farmers pay market rates for urea and receive a cash transfer to compensate, has not been implemented. It remains the biggest unpriced policy risk in the sector, and Q1 FY27 offered no resolution.
