Effect of Cost Structure on Profitability of Public Sector Fertilizer and Chemical Companies in India

The study examined the effect of cost structure on profitability of public sector fertilizer and chemical companies in India. The study considered the public sector firms such as, Madras Fertilizers Limited, Rashtriya Chemicals and Fertilizers Limited, Fertilizers and Chemicals Travancore Limited, and National Fertilizers Limited. The study is based on secondary data, which is collected from the annual reports of the companies for the period from 2020-21 to 2024-25. The motive of the study is to analyze the cost structure, assess profitability based on financial indicators, test the relationship between cost components and profitability, and evaluate the impact of cost control strategies on profitability. Results showed that cost structure is analyzed through raw material cost, power and fuel cost, operating expenses and employee cost, and the profitability is evaluated through financial indicators. It reveals that raw material and energy cost represent the main portion of total expenditure and significantly influence profitability. The negative relationship between cost components and profitability confirm long-run association. Results emphasize that effective cost management, operational efficiency, resource utilization are important to enhance profitability and ensure sustainable growth in public sector fertilizer and chemical companies in India.