Fertiliser shares gain; Deepak Fertiliser, RCF, GSFC hit 52-week high

National Fertilisers, GSFC, Deepak Fertilisers and RCF were up more than 20% each in past one-month.

Shares of fertiliser companies continued their upward movement with Rashtriya Chemicals and Fertilizers (RCF), National Fertilizers, Deepak Fertilisers & Petrochemicals Corporation and Gujarat State Fertilizers & Chemicals (GSFC) hitting their respective 52-week highs on the BSE in intra-day trade.

Most of the fertiliser stocks were trading higher in the range of 1% to 6% as compared to 0.23% rise in the S&P BSE Sensex at 01:19 pm. National Fertilisers, GSFC, Deepak Fertilisers, RCF and Mangalore Chemicals were among few those up more than 20% each in past one-month.

Analysts at Edelweiss Securities said the sector was hit by multiple headwinds in past few quarters such as erratic monsoon, raw material availability issues and depreciation of INR.

“We expect reversal of the downturn cycle and recovery in profitability over next 12?18 months, primarily on liquidation of excessive channel inventory and improved capacity utilization,” the brokerage firm said in Q3 results preview.

For the October-December (Q3) quarter, we expect slump in revenues and EBITDA due to liquidity crunch and high channel inventory. Further, with price cut taken by companies on lower raw material prices will maintain pricing pressure next quarter, added report.

“Although the profits in H2 FY2017 should be relatively better due to a further softening of raw material prices, the overall profits for FY2017 should remain weak due to overwhelming impact of weak H1 performance. Overall, the outlook for the fertiliser sector continues to remain stable with favourable agro-climatic conditions and liquidation of high systemic inventory,” ICRA, the rating agency said in a recent report.

COMPANY	LATEST	ONE-MONTH BEFORE	GAIN(%)
NATL.FERTILIZER	46.65	33.95	37.41
SHIVA GLOBAL	57.20	42.10	35.87
G S F C	115.50	87.70	31.70
DEEPAK FERT.	255.20	203.15	25.62
R C F	58.60	46.75	25.35
MANGALORE CHEM.	53.20	43.00	23.72
F A C T	28.35	23.05	22.99
RAMA PHOSPHATES	72.90	59.80	21.91
G N F C	263.90	216.55	21.87
ZUARI GLOBAL	114.10	93.65	21.84
CHAMBAL FERT.	83.50	69.05	20.93
NAGARJUNA FERT.	10.83	9.03	19.93
COROMANDEL INTER	328.00	277.60	18.16
S P I C	22.35	19.45	14.91
BHARAT AGRI	92.00	80.10	14.86
MADRAS FERT.	15.85	13.85	14.44
ZUARI AGRO CHEM.	257.75	229.60	12.26
ARIES AGRO	184.00	165.40	11.25
BASANT AGRO TECH	7.74	7.11	8.86
DHARAMSI MORARJI	115.50	107.45	7.49