GNFC, National Fertilizers, Deepak Fertilisers hit 52-week high in weak market

Tata Chemicals, RCF, GSFC, Chambal Fertilisers and Mangalore Chemicals were up 1%-3%.

Shares of fertilizers companies have rallied by up to 9% on the BSE during intra-day trade in an otherwise weak market.

Gujarat Narmada Valley Fertilizers & Chemicals (GNFC), National Fertilizers and Deepak Fertilisers & Petrochemicals Corporation and Aries Agro hitting their respective 52-week highs in intra-day trade. Fertilizers & Chemicals Travancore (up 7% at Rs 27) is trading nears to its 52-week high.

Tata Chemicals, Rashtriya Chemicals and Fertilizers (RCF), Gujarat State Fertilizers & Chemicals (GSFC), Chambal Fertilisers & Chemicals and Mangalore Chemicals & Fertilizers were trading higher in the range of 1%-3%. At 02:35 PM, the S&P BSE Sensex was down 1.1% at 25,492 points.

Five fertilizers companies that have announced their March 31, 2016 (Q4FY16) results posted an aggregate net profit of Rs 157 crore against a combined loss of Rs 327 crore in the same quarter previous fiscal.

GNFC has rallied 7% to Rs 126, extending its over 25% surge post March quarter results. Since April 25, the stock zoomed 40% from Rs 92, after the company posted a net profit of Rs 99 crore in Q4FY16 against a net loss of Rs 326 crore in the same quarter last fiscal. Net sales increased by 10% at Rs 1,308 crore as compared to 1,193 crore in the corresponding quarter of previous year.

The company attributed the strong performance due to highest ever production of ammonia, urea, ANP, CNA, formic acid and TDI as also the highest ever sales records in WNA, ANP, CNA, AN(Melt) and Technical Grade Urea.

According to rating agency ICRA, the modification of agreement between RasGas Company Limited, Qatar (RasGas) and Petronet LNG Limited (PLL) is a big positive for the fertiliser industry.

The pooled gas prices for the urea sector have reduced by US$1.4-1.5/mmbtu to US$7.5/mmbtu in January 2016, which in turn would lead to reduction in the variable cost of urea production and thus in the Government of India subsidy by Rs 60-62 billion a year. Lower subsidy for the industry in turn would lead to lower working capital borrowings and interest cost for companies, ICRA said in March 2016, fertiliser sector update.