Financial Performance of Indian Fertilizer Industry - A Comparative Evaluation of Private, Public and Cooperative Sector Companies

Author: S. Sowmiyaa, S. Moghana Lavanya, K. Mahendran and V. Geethalakshmi

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Abstract

Fertilizer Industry plays a prominent role in the Indian Agriculture and the economy. Indian food production has soared from 175 MT in 2002 – 2003 to 296 MT in 2019 – 2020 (Casey, 2020). With only a marginal increase in arable lands, the record productions are made possible with operational efficiency at the farm level. The judicial application of fertilizers has proven to increase the crop productivity worldwide. Reasons like residual effects, reduced soil fertility, imbalanced use of fertilizers, increased demand for organic products, etc., remain unwavering challenges to the industry. However, it has also opened up opportunities for innovations and segments like bio-fertilizers has seen an increasing demand trend over recent years. The article aims to analyse the financial performance of the industry as a whole, an under-explored area of study. The analysis takes into account private, public companies and cooperatives for the period of 2016-2020. The five-year average shows that

Keywords

Financial performance, Fertilizer industry, Altman Z Score, Performance Analysis.

Conclusion

According to the findings of the study, the fertilizer industry as a whole is in financially distress state. Going by the ownership pattern, private companies exercised better financial operations comparatively. The study also found that the companies found during the 1960s performed better financially compared to that were the companies established during later periods. Madras Fertilizers Limited fared poorly and the best performing company was Fertilizers and Chemicals Travancore Ltd. Altman Model is a simple yet profound model to understand the financial performance of the companies. The fertilizer industry is predicted to have a CAGR of 11.9% during 2020-2025. Growing population, increased demand, changing customer preferences etc acted as a stimulus to boost fertilizer production in India. Environmental and residual effects of chemical fertilizers have been realized and a shift has been seen from chemical based fertilizers to organic bio based fertilizers. This o

References

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How to cite this article

Sowmiyaa, S., Lavanya, S. M., Mahendran, K. and Geethalakshmi, V. (2021). Financial Performance of Indian Fertilizer Industry - A Comparative Evaluation of Private, Public and Cooperative Sector Companies. Biological Forum – An International Journal,