What are agriculture stocks?
Agriculture stocks are shares of companies that support farming and related activities. These businesses may make fertilisers, seeds and other products that farmers use to grow crops.
The agriculture sector covers more than growing and harvesting crops. It also includes companies that supply farm inputs, develop agricultural chemicals and provide solutions to improve crop yields.
When you invest in agriculture stocks, you invest in these businesses rather than directly in the farming process. Their performance depends on factors such as demand, weather conditions, government policies and production costs.
Agriculture sector at a glance
Agriculture remains important to India’s economy. It supports food production, provides livelihood and creates demand for products such as fertilisers and pesticides. The sector also depends on rainfall, irrigation, soil conditions and the prices farmers earn for their produce.
India’s agriculture industry is changing as companies look for ways to improve productivity. Better farm inputs, improved irrigation and newer farming methods can help use resources more efficiently. These changes can create business opportunities for companies in this sector.
The 2025 Union Budget focused on improving farming, increasing pulse production and making more credit available to farmers. It announced a new scheme for 100 districts, a 6-year pulse mission and a higher Kisan Credit Card loan limit of ₹5 lakh, up from ₹3 lakh. These steps are meant to help increase farm production.
However, the sector faces challenges. A weak monsoon can affect crop output and overall spending on farm inputs. Changes in fertiliser subsidies, restrictions on chemical products and higher raw material costs can also affect company earnings.
As an investor, you should know that, unlike other sectors, agriculture stock growth depends on more than just food demand. It also depends on how well individual companies manage costs, develop products and respond to changes in government policies and regulations.
Overview of the Top 5 Agriculture Stocks
Here are 5 companies linked to India’s agriculture sector through fertilisers, seeds and other agricultural products.
Note: Fertilisers and Chemicals Travancore shows a PE ratio of 0 because the company reported net losses in the last year.
UPL Limited
UPL Limited develops crop protection products, seeds and other agriculture solutions. Its products help farmers manage pests, weeds and crop diseases. The company also operates in international markets, so its business is linked to farming demand across different countries. UPL’s performance can depend on crop prices, raw material costs and changes in agriculture regulations.
Coromandel International
Coromandel International manufactures fertilisers and crop protection products. It also operates in areas such as speciality nutrients and agricultural services. The company serves farmers through its product network and related services. Its business is closely linked to demand, government subsidy policies and raw material prices.
PI Industries
PI Industries works in agricultural chemicals and provides research, development and manufacturing services for chemical products. Its custom synthesis and manufacturing business develops products for global agrochemical companies. This gives the company a role beyond selling farm inputs directly to Indian farmers. Since it is exposed to international markets, global demand and regulatory requirements can influence its business.
Fertilisers and Chemicals Travancore
Fertilisers and Chemicals Travancore Limited (FACT) is a government-owned company that makes and sells fertilisers. Its products include FACTAMFOS, which contains nitrogen, phosphorus and sulphur, and ammonium sulphate. Farmers use these fertilisers to support plant growth and improve crop development. FACT also helps farmers through services such as soil testing and training.
Deepak Fertilisers
Deepak Fertilisers and Petrochemicals Corporation Limited makes fertilisers, crop nutrition products and industrial chemicals. Its crop nutrition products help farmers meet the nutrient needs of their crops. The company also supplies chemicals to industries outside agriculture. This means its business depends on both the farming sector and demand from other industries.
How to pick the right agriculture stocks?
Before choosing agriculture stocks, understand which part of the sector a company serves. Then check how its business may be affected by changes in external factors. Points to consider include:
- Product demand: Check which crops and regions the company serves. Demand for its products may change depending on the crops farmers grow and the problems they face.
- Monsoon and irrigation exposure: Find out how dependent the company’s customers are on rainfall. Weak rainfall can affect crop output and farmers’ spending on farm inputs.
- Raw material availability: Fertiliser and chemical manufacturers need raw materials to make their products. Check whether the company faces supply issues or rising input costs.
- Product approvals and regulations: Agricultural chemicals must meet regulatory requirements. Changes in product approvals or restrictions can affect what a company is allowed to sell.
- Research and new products: Check whether the company develops new products or improves existing ones. New solutions may help it respond to changing farming needs and compete with other manufacturers.
- Business mix: Some companies earn most of their revenue from agriculture, while others also serve industrial or international customers. Understanding this mix helps you see what can drive their performance.
The bottom line
Agriculture stocks can offer a way to invest in businesses that support India’s farming industry. But not every company benefits in the same way when the sector grows. A fertiliser manufacturer and a seed reseller company may face different costs and business challenges.
If you’re starting out investing, you can explore mutual funds on the Millions app. A mutual fund can spread your money across several companies instead of relying on one stock. You can select a fund with particular exposure to agriculture stocks in its portfolio. SIP also gives you an option to start with an amount that fits your budget and learn as you go.
