Coromandel International, Deepak Fertilisers, RCF,GNFC to benefit from NBS policy: SPA Securities

MUMBAI: SPA Securities is of the view that new fertiliser policy based nutrient based subsidy is likely to benefit companies like Coromandel International, Deepak Fertilisers, RCF and GNFC.

"The NBS regime is expected to promote balanced fertilisation, which is currently skewed towards 'N' due to higher consumption of urea, one of the highly subsidised fertilisers. It will increase agriculture productivity by improving soil conditions and fertility in the country through higher usage of secondary and micro nutrients.

"Companies such as Coromandel International, Deepak Fertilisers, RCF and GNFC will benefit. Out top pick is Coromandel International due to its leadership position in complex fertilisers with strategic tie-ups to source inputs such as phosphoric acid and rock phosphate. The full impact on earnings would be possible to estimate only once the government decides amount of per nutrient subsidy.

Hike in price doesn't affect urea manufacturers such as Tata Chemicals, Chambal Fertilisers, National Fertilisers as price hike does not result in higher margins for the players. It will only reduce subsidy burden for the government. Implementation of NBS comes positive for all phosphatic, potassic and complex fertiliser manufacturers," the report said.