Top 10 Agriculture Stocks in India: Sowing the Seeds of Profit

When discussing the top 10 agriculture stocks in India, it’s important to notice the evolving eating habits among different age groups in our country. On one hand, there’s a growing demand for organic products, while teenagers and young adults are increasingly opting for on-the-go eating and snacking between meals. Meanwhile, people in their mid-20s and 30s are shifting towards healthier eating alternatives. This varying pattern is evident in both urban and rural areas.

Given that 55% of the country’s population relies on agriculture for their livelihood, it’s crucial to highlight the significance of this sector. As we discuss the top 10 agriculture stocks in India, it’s worth noting the substantial advancements, investments, and government support the Agriculture and Allied industry sector has received recently. As per IBEF, Between April 2000 and September 2023, agriculture services attracted FDI totaling US$ 4.77 billion.

For years, businessmen and entrepreneurs have capitalised on the agriculture and allied sector. Now, with the sector experiencing such rapid growth and development, there’s never been a better time for investors and market enthusiasts to seize this opportunity as well. Without further ado let’s get started with our discussion!!

Top 10 Agriculture Stocks in India

The Top 10 Agriculture Stocks in India are: PI Industries, Bayer CropScience Ltd, UPL Ltd, Godrej Agrovet Ltd, Coromandel International Ltd, Meghmani Organics Ltd, Kaveri Seed Company Ltd, Rallis India Ltd, Sumitomo Chemical India Ltd, Agri-Tech (India) Ltd.

Data collected as on 24th May, 2024.

Also explore Media Stocks In India 2024- IPL, Elections And The Movies Lineup

Let’s Explore Some Of The Agriculture Stocks In India in 2024

UPL Ltd

UPL Ltd, a large-cap stock with a market capitalisation of ₹38,716 Crores and a constituent of the Nifty 50 index, currently exhibits several financial challenges. The company’s profitability ratios are notably poor, with ROCE of 3.31% and ROE of -4.83%. Both the metrics are significantly below desirable levels. Furthermore, the price-to-earnings (P/E) Ratio stands at -32.26, indicating negative earnings. TTM EPS for UPL Ltd is ₹-15.99 reflecting a substantial decline from the previous year’s EPS of ₹47.56. It suggests inconsistency in earnings, which is detrimental to the company’s financial health.

Moreover, the company’s debt-to-equity ratio of 1.15 indicates that debt is the primary source of financing for its assets, which has some potential risks. Promoter Shareholding remained constant at 32.35% in the most recent quarter. However, the company’s annual revenue decreased by 19.37% over the last year to ₹43,581 Crores. Further, the annual net profit plummeted by 133.61% to ₹1,200 Crores. Correspondingly, UPL Ltd.’s stock price fell by 23.68%, significantly underperforming its sector by 42.48% over the past year.

These financial indicators highlight substantial areas of concern for UPL Ltd, necessitating strategic interventions to improve profitability, stabilize earnings, and manage debt levels more effectively.

3-Year Performance:

-Profit Growth Compounded: −70.95%
-CAGR for Stock Price Growth: -14%
-Growth in Compound Sales: 4%
-Equity Return: 8%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: -130%
-CAGR for Stock Price: -25%
-Growth in Compound Sales: -20%
-Equity Return: -4%

Summing up

The company’s fundamentals and past year performance are not impressive. However, it is the only company from the chemical sector to be part of the Nifty 50 index. Additionally, it has 33.64% holdings by FIIs and 15.33% holdings by DIIs, indicating investor confidence in the company. Furthermore, many experts and analysts have given it positive ratings, highlighting the growth potential of the company in the coming years. As a stock belonging to the agricultural sector, it has a good reputation and can position itself among the sector leaders in the long run.

Godrej Agrovet Ltd

Godrej Agrovet, a mid-cap company with a market capitalisation of ₹10,535 Crores, showcases solid profitability ratios: ROCE at 13.6% and ROE at 14.8%. These figures reflect a healthy financial position. The company’s price-to-earnings (P/E) Ratio stands at 29.29, slightly below the sector average of 29.84.

Earnings per share (EPS) are positive and on the rise, with a TTM EPS of ₹18.71. The debt-to-equity Ratio is a healthy 0.52, indicating that the company primarily finances its assets through equity. Promoter shareholding remains steady at 74.05% in the most recent quarter. Annual revenue grew by 1.27% over the past year, reaching ₹9,601.87 Crores. Although the stock price rose by 28.37%, it underperformed its sector by 14.65% over the same period. Let’s move on the company’s performance.

3-Year Performance:

-Profit Growth Compounded: 5%
-CAGR for Stock Price Growth: 0%
-Growth in Compound Sales: 15%
-Equity Return: 15%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 49%
-CAGR for Stock Price: 28%
-Growth in Compound Sales: 2%
-Equity Return: 15%

The sound performance of this mid-cap company makes it a notable player among the top 10 Agriculture Stocks in India.

Coromandel International Ltd

The next stock in the list of Top 10 Agriculture Stocks in India is Coromandel International Ltd. With a market capitalization of ₹36,904 Crores, it is positioned as a large-cap company. The stock boasts robust profitability ratios, with ROCE at 26.0% and ROE at 18.9%. It has a price-to-earnings (P/E) Ratio of 22.47, which is lower than the sector average of 23.23, suggesting that the company is fairly valued.

Although earnings per share (EPS) have fluctuated over the past three years, they remain strong and positive, with a TTM EPS of ₹55.78. The debt-to-equity Ratio is a healthy 0.01, indicating that the company primarily finances its assets through equity. Promoter shareholding decreased slightly by 0.01% in the most recent quarter to 57.32%. Annual revenue fell by 25.2% last year to ₹22,289.75 Crores, while the sector’s average revenue growth for the last fiscal year was -4.19%. Despite this, the stock price rose by 35.13%, though it underperformed its sector by 29.18% over the past year.

3-Year Performance:

-Profit Growth Compounded: 7%
-CAGR for Stock Price Growth: 15%
-Growth in Compound Sales: 16%
-Equity Return: 24%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: -18%
-CAGR for Stock Price: 34%
-Growth in Compound Sales: -26%
-Equity Return: 19%

In summary, Coromandel International Ltd showcases impressive figures across various parameters.

Rallis India Ltd

A mid-cap Tata Group company with a market capitalisation of ₹5,202 Crores has a history spanning over 150 years. The company maintains decent profitability ratios, with an ROCE of 11.1% and an ROE of 8.27%. Its price-to-earnings (P/E) Ratio is 35.15, which is lower than the sector average of 55.1. Earnings per share (EPS) are positive and growing, with a TTM EPS of ₹ 7.61 per share.

The debt-to-equity Ratio is a healthy 0.07, indicating that the company’s assets are primarily financed through equity. Promoter shareholding remained stable in the most recent quarter at 55.08%. Annual revenue decreased by 10.59% last year, totaling ₹2,664 Crores, while the sector’s average revenue growth for the last fiscal year was -4.91%. The stock price rose by 40.46%, outperforming its sector by 21.66% over the past year.

3-Year Performance:

-Profit Growth Compounded: -13%
-CAGR for Stock Price Growth: -5%
-Growth in Compound Sales: 3%
-Equity Return: 8%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 60%
-CAGR for Stock Price: 39%
-Growth in Compound Sales: -11%
-Equity Return: 8%

The mid-cap TATA Group company has potential for growth in the long-run.

Agri-Tech (India) Ltd

The final company in our discussion of the top 10 Agriculture Stocks in India is Agri-Tech (India) Ltd. This microcap company, with a market capitalization of ₹114 Crores, is engaged in corporate farming. The company has decent profitability ratios, with an ROCE of 9.69% and an ROE of 10.1%. Its Price to Earnings (P/E) Ratio is 11.82, which is lower than the sector average of 29.84.

Agri-Tech (India) Ltd has successfully turned its losses into profitability, as shown by strong annual earnings per share growth. The TTM EPS stands at ₹16.40 per share, compared to -₹0.66 per share the previous year. The company is debt-free, with a Debt to Equity Ratio of zero. Promoter shareholding remained stable at 31.1% in the most recent quarter.

Annual revenue increased by 1,664.01% last year, reaching ₹10.89 Crores, significantly outpacing the sector’s average revenue growth of 8.65%. Annual net profit rose by 2,607.64% to ₹9.74 Crores, compared to the sector’s average net profit growth of 6.94%. The stock price rose by 89.96%, outperforming its sector by 53.91% over the past year.

3-Year Performance:

-Profit Growth Compounded: 159%
-CAGR for Stock Price Growth: 62%
-Growth in Compound Sales: -6%
-Equity Return: 3%

Twelve-Month Trailing Period (TTM) Performance:

-Profit Growth Compounded: 2597%
-CAGR for Stock Price: 90%
-Growth in Compound Sales: -30%
-Equity Return: 10%

Being an undervalued stock and one of the consistently highest-return stocks over the past five years, the company’s relative performance versus the industry is impressive. This makes it an attractive option for enthusiasts pursuing long-term goals.

Frequently Asked Questions

Bottom Line

Now that we have reached the end of our discussion, we have covered the top 10 Agriculture Stocks in India. Growing urbanisation, increased disposable incomes, shifting consumer behaviour, and the growing need for quick-service foods among nuclear families with dual incomes all point to the agriculture sector’s potential for expansion. Additionally, the rising demand for organic products and healthier eating alternatives has created opportunities for new and significant players in the market.

Government initiatives and policies like e-NAM, the National e-Governance Plan, and the construction of Digital Public Infrastructure have connected the traditional agriculture system in India with technology. Thus enhancing its value and enabling further market expansion.

In conclusion, there are tremendous untapped opportunities in the Indian agriculture sector for both established and emerging companies. These 10 agriculture stocks in India have the potential to achieve significant gains in the coming years.

That’s all for today’s post. Hope you get some valuable insights from here.

Happy reading!

Disclaimer

The blog is meant for informational purposes and serves the general analysis of the stocks. The contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a while. The post does not have any direct recommendations about investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfill their responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.