Indian Agrochemical Industry Revenue to Grow 7% Driven by Export Rebound
The Indian agrochemical industry is projected to see a 6-7% revenue growth this fiscal year, primarily due to a rebound in exports after two volatile years. This surge is supported by reviving global demand and normalized inventories. While domestic sales are slowed by a protracted monsoon, the industry's return to 8-10% growth next fiscal hinges on sustained export momentum and increased domestic demand, as per Crisil Ratings. Stable realisations and raw material prices will maintain operating margins.
The Indian agrochemical industry is set to experience a 6-7% increase in revenue this fiscal year, driven significantly by a rebound in exports after two years. This growth is bolstered by a timely revival in global demand and the normalization of inventories worldwide, even as domestic demand faces a slowdown due to extended monsoon rains impacting the kharif season. Crisil Ratings indicates that the industry's return to its long-term growth range of 8-10% next fiscal year is contingent on sustained export momentum and a recovery in domestic demand. Operating margins are expected to remain stable this fiscal and next, supported by steady realisations, stable raw material prices, and limited US tariff impacts.The recovery in export growth, particularly from Latin America (34%), North America (19%), and Europe (12%), is attributed to stabilizing global supply chains and improving demand. The US market remains steady, with 80-85% of Indian shipments being tariff-exempt. Domestically, however, the industry faces challenges from excess rainfall causing crop damage, product returns, and delayed field readiness. Anuj Sethi of Crisil Ratings noted that the overall 6-7% growth outlook is primarily volume-driven rather than price-led, with agrochemical prices stabilizing as China's post-lockdown inventory overhang eased. Realisations on imports from China have held steady, and with balanced inventories and stricter environmental norms, prices are expected to remain stable throughout the year. The report analyzed approximately 60 companies, representing nearly 90% of the industry's Rs 90,000 crore revenue.
