05 March 2012

Fertiliser Sector Subsidy cut in line with decline in global fertiliser price ::Emkay PDF link

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Fertiliser Sector
Subsidy cut in line with decline in global fertiliser price
·      CCEA has approved the Fertiliser Ministry’s proposal to reduce subsidy on decontrolled fertilizers. Reduction in subsidy is in line with decline in global fertiliser prices
·      Final subsidy rates for FY13 are- Rs24/kg for N (Rs 27.15/kg in FY12), Rs 21.8 for P(Rs 32.33/kg in FY12), Rs 24/kg for K (Rs 26.76/kg in FY12), Rs 1.68/kg for S (Rs 1.70/kg in FY12)
·      Proposed reduction in subsidy requires phos acid prices at US$920/mt (currently at US$ 960/mt) to maintain previous year margin which industry believes will materialize
·      Higher inventory level and fertiliser offtake at current prices are our key concerns putting near term pressure on complex fertiliser players like Coromandel (Hold), Zuari (NR)


Company
Reco
CMP
TP
Chambal
Accumulate
87
98
Coromandel
Hold
289
286
Deepak
Buy
157
185
GNFC
Buy
87
135
GSFC
Accumulate
395
530
Tata Chem
Accumulate
360
400
RCF
NR
68
NA
National Fert.
NR
92
NA
Zuari Ind
NR
483
NA


Click here to read report: Sector Update

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