Monsoon forecast cut to 90% of average hurt agri stocks.
FACT, NFL, Kaveri Seed and Eicher Motors fell up to 3.4%.
El Niño risk raised concerns over crop output and rural demand.
Shares of fertiliser, seed and tractor-linked companies fell up to 6% on Friday after India lowered its monsoon forecast for the June-September season, raising concerns over agricultural output, rural incomes and demand for farm-related products.
The sell-off followed the government's revised forecast of cumulative monsoon rainfall at 90% of the long-term average, lower than the 92% estimate issued in April. Authorities also warned that El Niño conditions could develop during the monsoon season, increasing the risk of weaker rainfall across key agricultural regions.
1 May 2026
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Among fertiliser stocks, Fertilisers and Chemicals Travancore (FACT) emerged as one of the biggest losers, falling 5% to ₹877.40 in afternoon trade. National Fertilizers (NFL) declined 2.8% to ₹75.9, while Rashtriya Chemicals and Fertilizers (RCF) dropped 2.6% to ₹129.2. Chambal Fertilisers and Chemicals slipped about 2.87% to ₹464.4.
Rural-Focused Stocks Under Pressure
The weakness extended beyond fertiliser makers. Kaveri Seed Company fell 3.5% to ₹868.1 as investors assessed the potential impact of lower rainfall on sowing activity and seed demand during the upcoming kharif season.
Tractor and farm-equipment manufacturers also witnessed selling pressure. Escorts Kubota declined around 1% to ₹2,851.2, while Eicher Motors fell nearly 3% to ₹7,205.5.
A normal or above-normal monsoon is generally considered positive for the rural economy as it supports crop acreage, farm incomes and demand for agricultural inputs such as fertilisers, seeds and tractors. It also boosts consumption across rural-focused sectors, including two-wheelers and consumer goods.
Rainfall Concerns Return
According to the revised outlook, central India, northwestern India and southern peninsular regions are expected to receive below-normal rainfall during the season, while northeast India is likely to witness normal precipitation.
The weather department also indicated that climate models are increasingly pointing towards the development of El Niño conditions during the monsoon period, a phenomenon historically associated with weaker rainfall in India.
The weaker rainfall outlook comes at a time when policymakers remain focused on food inflation risks. Economists have warned that deficient rains could affect agricultural output and lead to higher prices of key food commodities in the coming months.
Investors are also monitoring the potential impact on demand for fertilisers, crop nutrients and farm equipment, which are closely linked to monsoon performance and rural spending trends.
