Buy Chambal Fertilizers; expected beneficiary: Avinash Gorakshekar

Avinash Gorakshekar, Head Of Research, Anagram Capital Ltd. in a chat with ET Now gives his take on Chambal Fertilizers.

Chambal Fertilizers you have a buy call on that and also what with monsoons that were expecting to be extremely normal, do you maintain your bullish stance and where do you see this stock going forward from now on?

Actually within the fertilizer space we expect Chambal to be one of the major beneficiaries if there is any further positive surprise on the urea policy front and in our recent interaction with the company, it has clearly said that with the change in the nutrient policy norms announced by the government the company is planning to actually increase its DAP volumes by almost 30% to 40% in FY11.

So we expect pretty strong volume growth coupled with a good monsoon and therefore we feel that the fertilizer business will do well. The company has also got a reasonably large shipping business. The shipping business also would be giving a significant amount of revenue leg up this year.

They have introduced a new Aframax tanker this year and the rates have also been quite attractive so taking all these account these factors and plus the positive surprise which could come in from the change in the policy norms for urea fertilizers which has been long awaited. We expect that the stock could possibly see a target price of roughly about 73-74, I mean a target upside of roughly about 17%-18% in a next say 6 months.