Financial Daily from THE HINDU group of publications
Friday, Apr 01, 2005
Financial Daily from THE HINDU group of publications Friday, Apr 01, 2005 |
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Markets
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Stock Markets Fertiliser stocks up on monsoon hopes Our Bureau
Kolkata , March 31 Hopes of a better monsoon on Thursday improved the sentiment for fertiliser stocks. GNFC was the biggest gainer (up 6.65 per cent), followed by Chambal Fertiliser 4.74 per cent, Deepak Fertiliser 4.50 per cent, Nagarjuna Fertiliser 4.20 per cent and GSFC 3.60 per cent. According to analysts, the cheer over drops of rain in the last few days may be short-lived. Confusion also looms large over Government's subsidy calculation on phosphatic fertilisers even as the US stepped up accusation against India on creating trade barriers in fertilisers through subsidies. "The Government is yet to devise an alternative mechanism for calculating subsidy on phosphatic fertilisers for 2005-06. "Domestic manufacturers have not been able to begin negotiations with global exporters for phosphoric acid suppliers for the fiscal beginning from tomorrow", Mr Devarsh Vakil of Anagram Stockbroking observed. This may seriously disrupt supplies or have higher cost implication for the importers, which in turn further squeeze margins. The companies that are likely to be hit hard due to shortage of phosphoric acid include Tata Chemicals, Godavari Fertiliers, Madras Fertilisers, GSFC, Zurar Agro and Paradeep Phosphates, Mr Vakil added. The domestic fertiliser player for the topline growth depends on the rain god and for the maintenance of bottomline look towards the Government's subsidy plan and disbursements. As it is, according to Crisil, the operating margins for fertiliser players are likely to remain under pressure this fiscal on account of the Government policy aimed at weeding out inefficiencies and higher volatility in input costs. But, in Crisil's view, fertiliser consumption may go up because of the Budget thrust on irrigation and agriculture friendly measures. BG Group of UK, ONGC and Reliance would begin marketing of natural gas produced from the Panna/Mukta and Tapti fields in Mumbai offshore from tomorrow. However, even this positive (cheaper fuel) is still shrouded by confusion of over pricing.
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