Rashtriya Chemicals, Chambal Fertilisers, GNFC: Why fertiliser stocks jumped on March 10

This positive momentum in Indian equities followed a sharp slide in crude oil prices, amid news reports that the US-Iran conflict may be nearing resolution.

Fertiliser stocks were among the gainers in the trade, with Rashtriya Chemicals and Fertilizers surging as much as 18.5% to ₹130.40 apiece on the NSE.

Other gainers in the fertiliser space were Gujarat State Fertilizers & Chemicals – up nearly 9%; Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) – up nearly 6.5%; Coromandel International – up nearly 4%; Chambal Fertilisers and Chemicals – up over 4.6%; and Deepak Fertilisers and Petrochemicals Corporation – up 5.2%.

Why fertiliser stocks surged on Tuesday

Fertiliser stocks zoomed in trade after reports suggested that the government has proposed an additional ₹19,230 crore fertiliser subsidy in the supplementary grants.

Sentiment was further supported by the government providing a 70% gas allocation to the fertiliser sector, higher than market expectations of a lower allocation.

Prior to Tuesday's rally, fertiliser stocks in India had faced challenges in response to news of gas supply disruptions.

Fertiliser stocks came under pressure after reports of gas supply disruptions, as natural gas is the primary feedstock (raw material) used in the production of urea and several other fertilisers.

Any disruption in gas availability raises concerns about higher input costs, lower production, and potential supply shortages, which can hurt profitability.

Companies such as Chambal Fertilisers and Chemicals, National Fertilizers Limited, Rashtriya Chemicals and Fertilizers, Gujarat State Fertilizers & Chemicals, and GNFC rely heavily on a consistent natural gas supply for their plants.

If gas supply tightens, these companies may have to curtail output or source costlier alternative fuel, which could compress margins.

Moreover, disruptions in global LNG supply — especially from major exporters such as Qatar — tend to push up international gas prices, further increasing production costs for fertiliser manufacturers in India.

As a result, investors often turn cautious on fertiliser stocks amid uncertainty over feedstock availability and costs.