India’s agrochemicals industry to see double-digit growth in FY23 and FY24 on strong exports boost, says Crisil

India’s agrochemicals industry to see double-digit growth in FY23 and FY24 on  strong exports boost, says Crisil
  • India’s agrochemicals industry is expected to continue growing in double digits, according to research firm Crisil.
  • In its latest report, Crisil says that the agrochemical industry’s revenues are estimated to grow at 15-17% in FY23, and 10-12% in FY24 as India continues to benefit from “China plus one” strategy.
  • Analysts believe exports will remain one of the key contributors to the agrochemical industry’s growth going forward with a share of over 50% in the industry’s total revenue.
  • Amongst the key players in the Indian agrochemical industry are United Phosphorus, PI Industries and Sumitomo Chemical.
India’s agrochemicals sector will grow at 15-17% in FY23, primarily driven by strong exports and stable domestic demand, according to a report from research firm Crisil. The sector registered a 23% rise in the fiscal year ended 2022.

According to Crisil, in FY24 too, the industry revenue will see an expansion – of 10-12% – as India continues to benefit from the “China plus one” strategy of global players and as patents on key molecules expire.

“Export revenue is seen rising 18-20% this fiscal, with the US dollar appreciating ~9% so far and volume growing as global players continue to de-risk their China dependency. Next fiscal, exports will likely grow 12-14% as players keep up capex with an eye on molecules worth $4 billion going off-patent over the next two years,” said Poonam Upadhyay, director at Crisil Ratings.

As a result, exports will remain the major contributor to the agrochemicals sector accounting for around 53% of the total revenue, says the Crisil report.

India has been at the forefront of the chemicals and agrochemicals space during the last one decade because of tightening of environmental regulations in China in 2015 and its subsequent fallout on the global chemicals supply chain, according to a report by Centrum Institutional Research.


United Phosphorus (UPL) is the top pesticide and agrochemicals company in India based on market capitalization, followed by PI Industries and Sumitomo Chemical.
Top agrochemicals companies Market cap YTD % change
UPL₹55,313 crore-5%
PI Industries₹52,324 crore13%
Sumitomo Chemical₹23,639 crore21%
Bayer CropScience₹21,862 crore-2%
Fine Organic Industries₹17,185 crore 48%
BASF₹11,974 crore-8%
Rallis India₹4,595 crore-14%
Sharda Cropchem₹4,103 crore29%
Source: NSE, as on 3:30 p.m

Input costs to weigh
While the industry growth is expected to be in the double digits according to the Crisil report, high raw material prices are expected to take their toll.

The report says that prices of crude and yellow phosphorus, the key raw materials, shot up by 40-45% and 18-22%, respectively, in the latter half of the last fiscal.

“Continued high prices, despite some moderation lately, will dent gross margins by 90-110 basis points. However, higher operating leverage, derived from better cost absorption, will ensure overall operating margin remains at 15-16% this fiscal, only marginally lower compared with fiscal 2022. Margins are expected to stabilise at similar levels next fiscal,” said the report.

Higher operating leverage would help sustain operating margins at 15-16% in the current and next fiscal (16.6% last fiscal), despite input prices remaining elevated, as per the Crisil report.

Surplus rain in September, favourable weather conditions and continued government focus on improving farm incomes will aid growth in the domestic segment, which is expected to expand 10-12% in FY23, Crisil said.

Going ahead, supply chain disruptions, sharp volatility in raw material prices, and the next monsoon season will be key factors that will affect the sector’s growth, Crisil said.

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