Gujarat Narmada Valley Fert. BSE Code : 500670 Rs. 90.00 Face valueRs. 10.00
GNFC manufactures and distributes nitrogenous and phosphatic fertilizers like Urea, ANP and Calcium Ammonium Nitrate and chemicals like Ammonia, Weak Nitric Acid, Concentrated Nitric Acid, Methanol,Acetic Acid, Formic Acid, Aniline, TDI etc. In fact, GNFC is country's largest manufacturer of Acetic Acid, Methanol, Formic Acid and Aniline. Company is the only manufacturer of TDI in India. In total turnover of the company, fertilizer division accounts for nearly 53%. Scrip is being recommended for investment as GNFC is highly efficiently managed with most of its plants running at over 100% capacity, consistent track-record and Book Value of Rs 155/ as on 30- 09-2011 and scrip is available at 4.50xFY12E Eps. For 2010-11 GNFC paid dividend of Rs 3.25 per share. Despite loss of production of Ammonia for 70 days, GNFC achieved good performance with major plants operating at over 100% capacity utilization. Ammonia plant operated at 106.59%, Urea plant utilization was 101.14%, Formic Acid plant achieved utilization of 194%, Acetic Acid plant was opeating at 153%. Aniline plant produced 40,000 tonnes with capacity utilization of 114% and TDI plant operated at 127% of installed capacity. Methanol and MSU plants were not operated at thier full capacity in view of high cost of production of Methanol coupled with reduction in sales realisation. GNFC sold total of 7.85 lac tonnes of industrial products as compared to 6.68 lac tonnes in previous year. 2 project namely CNA-III and WNA-II have been completed in Q1 of current year involving capex of 324 crores. Project of Wet Sulphuric acid has been abandoned. Remaining 3 projects namely Cogen, Ethyl Acetate and TDI are under implementation and should be operational by Dec 2012.
GNFC has emerged as leading manufacturer of various chemicals in India: GNFC has reported much better results for H1 in current year wherein sales have grown from 1170 cr to1665 cr and Pat has flared by 200% to
122.50 crores giving Eps of 7.88. For2011-12, GNFCshould report Eps of Rs 20.10. Impact of projects under implementation will be felt in 2012-13 wherein turnover should cross 4000 cr mark and Eps can be Rs 27. In current dull market situation where long-term investors are looking for undervalued companies with consistent
track-record, sound business model, low debt, efficient management, constant growth, robus asset base, reasonably large size of business where demand for its products is growing, GNFC can be amongst the best picks as due to NBS based new fertilizer subsidy system, profitability of GNFC's fertilizer division has improved and its Chemical/industrial product division will continue to perform well due to dominant market share and most efficient operations. Moreover, company promoted by Gujarat Govt and hence, there cannot be any controversies (like Everonn or Educomp or GTL or ADSL), transparent management, clear accounting and truthfull reporting.
1. GNFC is available at just 4.50xFY12E Eps
2. GNFC is trading at just 3.25xFY13E Eps. Book Value as on 30.09.2011 is Rs 155/. GNFC is solid safe buy for genuine investors who can hold this scrip for 12-24 months. Its 52 week high was Rs 142 and currently scrip isavailable very close to its 52 week low of Rs 88/. If broader markets dont fall sharply, GNFC scrip can appreciate 30-40% in next few months and can go up 100% in less than 24 months.
GNFC has emerged as leading manufacturer of various chemicals in India: GNFC has reported much better results for H1 in current year wherein sales have grown from 1170 cr to1665 cr and Pat has flared by 200% to
122.50 crores giving Eps of 7.88. For2011-12, GNFCshould report Eps of Rs 20.10. Impact of projects under implementation will be felt in 2012-13 wherein turnover should cross 4000 cr mark and Eps can be Rs 27. In current dull market situation where long-term investors are looking for undervalued companies with consistent
track-record, sound business model, low debt, efficient management, constant growth, robus asset base, reasonably large size of business where demand for its products is growing, GNFC can be amongst the best picks as due to NBS based new fertilizer subsidy system, profitability of GNFC's fertilizer division has improved and its Chemical/industrial product division will continue to perform well due to dominant market share and most efficient operations. Moreover, company promoted by Gujarat Govt and hence, there cannot be any controversies (like Everonn or Educomp or GTL or ADSL), transparent management, clear accounting and truthfull reporting.
1. GNFC is available at just 4.50xFY12E Eps
2. GNFC is trading at just 3.25xFY13E Eps. Book Value as on 30.09.2011 is Rs 155/. GNFC is solid safe buy for genuine investors who can hold this scrip for 12-24 months. Its 52 week high was Rs 142 and currently scrip isavailable very close to its 52 week low of Rs 88/. If broader markets dont fall sharply, GNFC scrip can appreciate 30-40% in next few months and can go up 100% in less than 24 months.
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