FACT, Chambal Fertilisers shares up 4-5% as government eyes doubling fertiliser subsidy allocation

Fertiliser stocks witnessed strong buying interest on Wednesday, with shares of The Fertilisers and Chemicals Travancore (FACT) and Chambal Fertilisers & Chemicals surging 4-5% during the trading session. The rally followed reports that the Fertiliser Ministry has sought a significant increase in the subsidy budget for FY27.

According to government sources cited by PTI and The Times of India, the Ministry has approached the Finance Ministry to double the fertiliser subsidy allocation to Rs 1.71 lakh crore, reflecting mounting concerns over escalating global fertiliser prices and rising import costs.

The proposed hike comes amid disruptions linked to the ongoing West Asia conflict, which has pushed up international fertiliser prices and strained global supply chains. Officials have warned that if these challenges persist, India’s fertiliser subsidy bill could exceed Rs 3 lakh crore during the current fiscal year.

A prolonged disruption in shipping through the Strait of Hormuz, a critical trade route, could further inflate India’s fertiliser import bill and complicate procurement efforts. At the same time, a shrinking global supply pool continues to exert upward pressure on prices.

However, officials noted that the final subsidy requirement may ease somewhat as domestic fertiliser production continues to improve, helping offset part of the import burden.

India currently provides substantial subsidies on key fertilisers to shield farmers from price volatility. Neem-coated urea is sold at Rs 242 per 45 kg bag, while di-ammonium phosphate (DAP) is priced at Rs 1,350 per 50 kg bag.

The prospect of higher subsidy support and sustained demand optimism has put fertiliser stocks firmly in investors’ focus, making the sector one of the standout performers in Wednesday’s trade.

Share price snapshot

Fertilisers and Chemicals Travancore (FACT): Shares of FACT surged 5% to Rs 920 during Wednesday’s trade. The company currently has a market capitalisation of Rs 56,686 crore, while the stock’s 52-week high stands at Rs 1,085.Chambal Fertilisers & Chemicals: The stock advanced 4% to Rs 473, drawing investor attention amid the sector-wide rally. The company commands a market capitalisation of Rs 18,220 crore, and its 52-week high stands at Rs 580.70.

Technical indicators

FACT: The stock’s 14-day Relative Strength Index (RSI) is at 50.1. An RSI reading below 30 is generally considered oversold, while a reading above 70 indicates overbought conditions.

Chambal Fertilisers & Chemicals: The stock’s 14-day RSI stands at 49.2, suggesting neutral momentum. Typically, RSI levels below 30 signal oversold territory, whereas readings above 70 point to overbought conditions.

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