The Hindu Business Line : Fertiliser stocks jump on Govt bond plans

Fertilisers stocks such as RCF (Rashtriya Chemicals & Fertilizers Ltd), National Fertilisers etc rose more than 10 per cent the past week. The National Fertilisers was up 10.43 per cent at Rs 36 compared to a week ago, RCF gained 12.96 per cent at Rs 53.15, Chambal Fertilizers & Chemicals Ltd was up 32.89 per cent at Rs 44.85.

Analysts say that this sector had not moved up in the last 12-15 months and so there has been new valuation in this sector, also the fact that this sector is one of the defensive sectors might be its road to a rise. “Assured returns sector are in the limelight a fortnight ago it was the power generation sector now it is the fertiliser sector whose stocks seem to have gone up owing to the subsidy which the Government has laid up for it”, said an analyst from a broking firm.

According to an ENAM Securities Pvt Ltd report, “rising food grain demand with an increasing population and limited acreage to translate into additional fertiliser needs. “There is no perfect substitute for chemical fertilisers due to limitations of organic fertilizers in terms of quality as well as availability.”

The Fertilizers & Chemicals Travancore Ltd (FACT), which was one of the worst-affected fertiliser producers among the Central public sector undertakings in the country on account of the changes in Government policies, increase in the cost of energy inputs and lack of proper diversification and expansion, too went up by 18.68 per cent to Rs 26.05.

Domestic supply expected to increase manifold with natural gas discoveries in the Krishna Godavari basin and the Mahanadi delta, said the ENAM report. Cross border pipelines expected to further increase natural gas availability in the country, the report added.

“If the governments problem of the nuclear deal gets solved and the fear of some major political change recedes, the market also might go up sharply and this will also boost fertiliser stocks further,” said Mr Shailesh Shah, a broker with Rapid Capital Services.