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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
|
|
|
|
|
|
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