Cirumalla expects lower energy, feedstock and logistics costs to support the sector, while reducing concerns around raw material availability. He said the benefits are likely to become more visible after a challenging first quarter.
According to Cirumalla, fertiliser companies stand to benefit the most because India imports key raw materials such as urea, sulphur and methanol from West Asia. Improved availability of these inputs should help stabilise costs across the sector.
He said companies benefited in the March quarter from price hikes, rupee depreciation and inventory gains, but margin pressure emerged in the June quarter due to rising input costs.
The easing in raw material costs could also provide relief to the government’s SRF subsidy bill. Cirumalla noted that subsidy requirements could have risen significantly had elevated prices persisted for a longer period.
From an industry perspective, he expects working capital cycles to improve as raw material costs moderate. However, demand will continue to depend on rainfall conditions and kharif sowing activity.
While concerns around Navin Fluorine remain, Cirumalla said fertiliser demand has historically remained relatively resilient during the first year of deficient rainfall.
In the speciality chemicals segment, he highlighted refrigerant gases as a key area of strength. He said prices for R32 refrigerants have remained firm in both domestic and export markets, supported by extended summer demand.
“As far as 2026 is concerned, we don’t see any risk to the realisation,” Cirumalla said.
He added that additional industry capacity could lead to price corrections from 2027, but current market conditions remain supportive for companies such as SRF and Navin Fluorine.
For the full interview, watch the accompanying video
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