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Company Description:
Incorporated in 1984, RPL is one of the leading fertilizer manufacturers in India. Rama Phosphates is in existence for last 27 years and one of its units at Pune is in existence for last 40 years and pioneer in India. RPL has two manufacturing wings viz., Fertilizer and Edible oil. It is engaged in manufacturing phosphatic fertilizers viz. Single Super Phosphate (SSP) (Powder as well as Granule), mixed fertilizers namely NPK and chemicals like Sulphuric Acid (SA), Oleum etc. Total capacity of SSP is 4.62 lakh tpa and SA is 1.83 lakh tpa. RPL sells its fertilizer products under the Girnar and Suryaphool brand names.
RPL‟s Indore plant has installed capacity of 1, 65, 000 tpa of SSP and 1, 02,000 tpa of sulphuric acid. It has state-of-the-art solvent extraction plant which includes seed crushing, packing and distribution facilities as also in-house captive power generation which is generated by exo-thermic heat produced in the process of manufacturing sulphuric acid.
RPL‟s Pune plant is one of the oldest SSP plant in India with existence of over 40 years, popularly known as “Rama Krishi Rasayan”. The plant is fully integrated with all requisite facilities. The capacity of the Pune plant is 1, 65,000 tpa of SSP, 350 tpd of GSSP, 150 tpd of mixed fertilizers and 81, 600 tpa of sulphuric acid. RPL’s Udaipur plant in Rajasthan has capacity of 1, 32, 000 tpa of SSP.
The company‟s oil division also has capacity of seed crushing of 1, 65, 000 tpa at an average of 600 tpd. The company‟s plant is fully integrated plant with all requisite facilities for storage of seeds in silos, crushers, expanders, flakers, storage godown for de-oiled cake and tanks for storing crude oil. The main highlight of its oil plant is that it has been awarded ISO-140001 from Japan for environment protection in the factory premises.
Parallel to crushing plant, company is also having its own refinery plant with Alfa Laval technology for refining crude soya oil of 33,000 tpa at 100 tpd. The company‟s brand “Sufla” is one of the most popular brands in Madhya Pradesh and other Northern parts of India.
Company Description:
Incorporated in 1984, RPL is one of the leading fertilizer manufacturers in India. Rama Phosphates is in existence for last 27 years and one of its units at Pune is in existence for last 40 years and pioneer in India. RPL has two manufacturing wings viz., Fertilizer and Edible oil. It is engaged in manufacturing phosphatic fertilizers viz. Single Super Phosphate (SSP) (Powder as well as Granule), mixed fertilizers namely NPK and chemicals like Sulphuric Acid (SA), Oleum etc. Total capacity of SSP is 4.62 lakh tpa and SA is 1.83 lakh tpa. RPL sells its fertilizer products under the Girnar and Suryaphool brand names.
RPL‟s Indore plant has installed capacity of 1, 65, 000 tpa of SSP and 1, 02,000 tpa of sulphuric acid. It has state-of-the-art solvent extraction plant which includes seed crushing, packing and distribution facilities as also in-house captive power generation which is generated by exo-thermic heat produced in the process of manufacturing sulphuric acid.
RPL‟s Pune plant is one of the oldest SSP plant in India with existence of over 40 years, popularly known as “Rama Krishi Rasayan”. The plant is fully integrated with all requisite facilities. The capacity of the Pune plant is 1, 65,000 tpa of SSP, 350 tpd of GSSP, 150 tpd of mixed fertilizers and 81, 600 tpa of sulphuric acid. RPL’s Udaipur plant in Rajasthan has capacity of 1, 32, 000 tpa of SSP.
The company‟s oil division also has capacity of seed crushing of 1, 65, 000 tpa at an average of 600 tpd. The company‟s plant is fully integrated plant with all requisite facilities for storage of seeds in silos, crushers, expanders, flakers, storage godown for de-oiled cake and tanks for storing crude oil. The main highlight of its oil plant is that it has been awarded ISO-140001 from Japan for environment protection in the factory premises.
Parallel to crushing plant, company is also having its own refinery plant with Alfa Laval technology for refining crude soya oil of 33,000 tpa at 100 tpd. The company‟s brand “Sufla” is one of the most popular brands in Madhya Pradesh and other Northern parts of India.
SSP is a straight phosphatic multi-nutrient fertilizer which contains 16% water soluble P2O5, 12% sulphur, 21% calcium and some other essential micro nutrients in small proportions. SSP, which is a poor farmer's fertilizer (price-wise), is an option to optimise the use of phosphatic fertilizers. It also helps to treat sulphur deficiency in soils (40% Indian soil sulphur deficient) as well for further enhancement of yields at the least cost. In various crops, which require more of sulphur and phosphate like oilseeds, pulses, sugarcane, fruits and vegetables, tea etc, SSP is an essential fertilizer.
India is the second largest consumer of fertilizer in the world next to China. Demand for fertilizer will keep on increasing in future to ensure food security of the country. To meet increasing demand future policies should encourage domestic capacity of fertilizer as international prices are volatile. Currently, fertilizer industry operates under stringent regulations.
However from April, 2010 onwards the Government has implemented 'Nutrient Based Subsidy' Policy for 'P' & 'K' fertilizer with market driven selling prices. This policy has brought some free space for industry for efficient operations and started boosting the SSP industry.
The Nutrient Based Subsidy (NBS) Policy for the first time has recognized that the value for each nutrient irrespective of the source should be the same. Till now the same „P‟ in DAP and other NPKs was getting much higher subsidy as compared to the „P‟ in SSP. Furthermore, for the first time the Sulphur (S) content in SSP has been recognized as a major nutrient and subsidy is being given on this nutrient also. Equal subsidy on „P‟ and subsidy on „S‟ makes SSP a very viable product.
Post NBS policy, the subsidy on SSP has gone up from `2000 per MT to `4400 per tonne with effect from 1st May 2010 and further to `4908 in FY11-12. Further upward revision in subsidy is likely to be effected in the near future. The increase in subsidy of `2908 per tonne has changed the fortunes of SSP manufacturers.
The availability of Railway siding and strategic locations of the plants has put the company in most advantageous position as it can transport its basic raw material Rock Phosphate from the mines located far away in Rajasthan as also imported Rock phosphate from nearby ports of Mumbai and also transportation of its finished goods by rail to strategic locations situated in different parts of the country.
With the establishment of its brand leadership in Madhya Pradesh and Maharashtra states, RPL would be in a position to reap benefits in the days to come. The company is also planning to plunge in a big way in Uttar Pradesh, Karnataka and Andhra Pradesh markets.
With the implementation of NBS policy, which envisages at-par treatment with other complex fertilizers, will help in improving capacity utilization and performance of the company in the years to come.
RPL is likely to post an EPS of `20 in FY11 and `23 in FY12. At the CMP of `75, the share is trading at a P/E of 3.7x on FY11E and 3.3x on FY12E. We recommend BUY with a target of `100 in the medium term.
SSP industry is at the mercy of monsoon and vagaries of monsoon affect its fortune. The uncertainty in timely release of concession payment from the Government of India poses a great threat to capacity utilization.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Company Description:
Incorporated in 1984, RPL is one of the leading fertilizer manufacturers in India. Rama Phosphates is in existence for last 27 years and one of its units at Pune is in existence for last 40 years and pioneer in India. RPL has two manufacturing wings viz., Fertilizer and Edible oil. It is engaged in manufacturing phosphatic fertilizers viz. Single Super Phosphate (SSP) (Powder as well as Granule), mixed fertilizers namely NPK and chemicals like Sulphuric Acid (SA), Oleum etc. Total capacity of SSP is 4.62 lakh tpa and SA is 1.83 lakh tpa. RPL sells its fertilizer products under the Girnar and Suryaphool brand names.
RPL‟s Indore plant has installed capacity of 1, 65, 000 tpa of SSP and 1, 02,000 tpa of sulphuric acid. It has state-of-the-art solvent extraction plant which includes seed crushing, packing and distribution facilities as also in-house captive power generation which is generated by exo-thermic heat produced in the process of manufacturing sulphuric acid.
RPL‟s Pune plant is one of the oldest SSP plant in India with existence of over 40 years, popularly known as “Rama Krishi Rasayan”. The plant is fully integrated with all requisite facilities. The capacity of the Pune plant is 1, 65,000 tpa of SSP, 350 tpd of GSSP, 150 tpd of mixed fertilizers and 81, 600 tpa of sulphuric acid. RPL’s Udaipur plant in Rajasthan has capacity of 1, 32, 000 tpa of SSP.
The company‟s oil division also has capacity of seed crushing of 1, 65, 000 tpa at an average of 600 tpd. The company‟s plant is fully integrated plant with all requisite facilities for storage of seeds in silos, crushers, expanders, flakers, storage godown for de-oiled cake and tanks for storing crude oil. The main highlight of its oil plant is that it has been awarded ISO-140001 from Japan for environment protection in the factory premises.
Parallel to crushing plant, company is also having its own refinery plant with Alfa Laval technology for refining crude soya oil of 33,000 tpa at 100 tpd. The company‟s brand “Sufla” is one of the most popular brands in Madhya Pradesh and other Northern parts of India.
Company Description:
Incorporated in 1984, RPL is one of the leading fertilizer manufacturers in India. Rama Phosphates is in existence for last 27 years and one of its units at Pune is in existence for last 40 years and pioneer in India. RPL has two manufacturing wings viz., Fertilizer and Edible oil. It is engaged in manufacturing phosphatic fertilizers viz. Single Super Phosphate (SSP) (Powder as well as Granule), mixed fertilizers namely NPK and chemicals like Sulphuric Acid (SA), Oleum etc. Total capacity of SSP is 4.62 lakh tpa and SA is 1.83 lakh tpa. RPL sells its fertilizer products under the Girnar and Suryaphool brand names.
RPL‟s Indore plant has installed capacity of 1, 65, 000 tpa of SSP and 1, 02,000 tpa of sulphuric acid. It has state-of-the-art solvent extraction plant which includes seed crushing, packing and distribution facilities as also in-house captive power generation which is generated by exo-thermic heat produced in the process of manufacturing sulphuric acid.
RPL‟s Pune plant is one of the oldest SSP plant in India with existence of over 40 years, popularly known as “Rama Krishi Rasayan”. The plant is fully integrated with all requisite facilities. The capacity of the Pune plant is 1, 65,000 tpa of SSP, 350 tpd of GSSP, 150 tpd of mixed fertilizers and 81, 600 tpa of sulphuric acid. RPL’s Udaipur plant in Rajasthan has capacity of 1, 32, 000 tpa of SSP.
The company‟s oil division also has capacity of seed crushing of 1, 65, 000 tpa at an average of 600 tpd. The company‟s plant is fully integrated plant with all requisite facilities for storage of seeds in silos, crushers, expanders, flakers, storage godown for de-oiled cake and tanks for storing crude oil. The main highlight of its oil plant is that it has been awarded ISO-140001 from Japan for environment protection in the factory premises.
Parallel to crushing plant, company is also having its own refinery plant with Alfa Laval technology for refining crude soya oil of 33,000 tpa at 100 tpd. The company‟s brand “Sufla” is one of the most popular brands in Madhya Pradesh and other Northern parts of India.
SSP is a straight phosphatic multi-nutrient fertilizer which contains 16% water soluble P2O5, 12% sulphur, 21% calcium and some other essential micro nutrients in small proportions. SSP, which is a poor farmer's fertilizer (price-wise), is an option to optimise the use of phosphatic fertilizers. It also helps to treat sulphur deficiency in soils (40% Indian soil sulphur deficient) as well for further enhancement of yields at the least cost. In various crops, which require more of sulphur and phosphate like oilseeds, pulses, sugarcane, fruits and vegetables, tea etc, SSP is an essential fertilizer.
India is the second largest consumer of fertilizer in the world next to China. Demand for fertilizer will keep on increasing in future to ensure food security of the country. To meet increasing demand future policies should encourage domestic capacity of fertilizer as international prices are volatile. Currently, fertilizer industry operates under stringent regulations.
However from April, 2010 onwards the Government has implemented 'Nutrient Based Subsidy' Policy for 'P' & 'K' fertilizer with market driven selling prices. This policy has brought some free space for industry for efficient operations and started boosting the SSP industry.
The Nutrient Based Subsidy (NBS) Policy for the first time has recognized that the value for each nutrient irrespective of the source should be the same. Till now the same „P‟ in DAP and other NPKs was getting much higher subsidy as compared to the „P‟ in SSP. Furthermore, for the first time the Sulphur (S) content in SSP has been recognized as a major nutrient and subsidy is being given on this nutrient also. Equal subsidy on „P‟ and subsidy on „S‟ makes SSP a very viable product.
Post NBS policy, the subsidy on SSP has gone up from `2000 per MT to `4400 per tonne with effect from 1st May 2010 and further to `4908 in FY11-12. Further upward revision in subsidy is likely to be effected in the near future. The increase in subsidy of `2908 per tonne has changed the fortunes of SSP manufacturers.
The availability of Railway siding and strategic locations of the plants has put the company in most advantageous position as it can transport its basic raw material Rock Phosphate from the mines located far away in Rajasthan as also imported Rock phosphate from nearby ports of Mumbai and also transportation of its finished goods by rail to strategic locations situated in different parts of the country.
With the establishment of its brand leadership in Madhya Pradesh and Maharashtra states, RPL would be in a position to reap benefits in the days to come. The company is also planning to plunge in a big way in Uttar Pradesh, Karnataka and Andhra Pradesh markets.
With the implementation of NBS policy, which envisages at-par treatment with other complex fertilizers, will help in improving capacity utilization and performance of the company in the years to come.
RPL is likely to post an EPS of `20 in FY11 and `23 in FY12. At the CMP of `75, the share is trading at a P/E of 3.7x on FY11E and 3.3x on FY12E. We recommend BUY with a target of `100 in the medium term.
SSP industry is at the mercy of monsoon and vagaries of monsoon affect its fortune. The uncertainty in timely release of concession payment from the Government of India poses a great threat to capacity utilization.
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