Fertiliser stocks rallied sharply up to 20 per cent on Tuesday after the government introduced new regulations aimed at ensuring steady natural gas availability for priority sectors amid the West Asia conflict, triggering strong investor interest across the segment.
Shares of major fertiliser manufacturers — Fertilizers and Chemicals Travancore (FACT), Rashtriya Chemicals and Fertilizers (RCF), Chambal Fertilisers, Deepak Fertilisers, Paradeep Phosphates, and Gujarat Narmada Valley Fertilizers & Chemicals — rallied between 5 per cent and 20 per cent during the trading session.
Among these, shares of FACT settled 20 per cent higher at its upper circuit (₹795.10) on the BSE. RCF zoomed over 16 per cent to close at ₹127.80.
The rally followed the government’s issuance of the Natural Gas Regulation Order, 2026, the Domestic Piped Natural Gas (D-PNG) supply, Compressed Natural Gas (CNG) for transport, LPG production, pipeline compressor fuel, and other essential pipeline operational requirements.
To fertlisill, it will be capped at 70 per cent of the last six-month average.
According to Antu Eapen Thomas, Research Analyst, Geojit Investments, investors will closely monitor signs of geopolitical de-escalation.
Pertaining to the latest order, he said, the current lean season and preponed maintenance at certain facilities are expected to ease near-term gas demand.
Global natural gas supply chains have been under strain after Qatar Energy declared force majeure on certain shipments. The announcement triggered a ripple effect across international energy markets, disrupting contracted supplies and forcing several client nations and companies to reassess procurement strategies.
According to ICRA Research, the rise in ammonia as well as LNG prices may impact the profitability of phosphorus and potassium (P&K) fertiliser players unless subsidy corrections are made in the upcoming Nutrient-Based Subsidy (NBS) rate revision. This could push up the fertiliser subsidy bill of the GoI in FY2027 (Budget Estimates: ₹1.7 lakh crore), it added.
Urea prices have increased sharply on March 4, 2026 to around $597/MT from around $484/MT on February 27, 2026, reflecting supply disruptions from the West Asian nations. Similarly Di-ammonium Phosphate (DAP) prices have also risen sharply.
“As the current situation reflects lack of availability of supplies along with constrained domestic production, India faces an uphill task to maintain a reasonable level of availability of fertilisers for the upcoming season, it cautioned..