Agrichemical Companies in South India Better Positioned for Growth
20 September 2017 The profitability of agrichemicals companies that have operations in south India is likely to stay better than those of industry peers in the current financial year, following a recovery in sales after a weak June quarter, writes ilip Kumar Jha on Business-Standard.com.
While all companies in the agrichemicals space faced destocking problems in the June quarter ahead of the introduction of the goods and services tax (GST) on July 1, a delay in the monsoon rains has aggravated the situation, resulting in subdued profit margins. Many stockists returned their goods to the manufacturer, resulting in a sharp decline in profits.
However, sales bounced back in the second fortnight of July. Good rain also boosted sentiment. Thus, the sowing of heat-tolerant crops such as those in horticulture and cotton resumed.
“The south India kharif crop condition is good compared to last year. Cotton sowing in the south was delayed due to the late arrival of the rains. Overall, the south Indian agrichemicals market is expected to grow 15-20% year-on-year. We continue to maintain our positive views on Chambal Fertilisers and Deepak Fertilisers.
Read more at Business-Standard.com.
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