Deepak Fertilizer, GSFC: Fertilizer stocks may soar 16% on subsidy push

A sharp rally in fertilizer stocks on Thursday on hike in subsidy has opened doors for more upside in the coming days

Fertiliser stocks gained ground at the bourses on Thursday after the Centre increased its share of subsidy for di-ammonia phosphate (DAP) by 140 per cent from Rs 500 to Rs 1,200 per bag, translating into reduction of market price of DAP from Rs 2,400 per bag to Rs 1,200 per bag. The cost to the government would be around Rs 14,775 crore.

According to a note by ICICI Securities, reduction in prices would benefit farmers while there will be increase in the subsidy burden on the company. However, it does not expect it to have a major impact on the balance