Gas pooling policy positive for fertiliser pack: Prakash Diwan

In a chat with ET Now, Prakash Diwan of Altamount Capital shares his view on fertiliser sector.

ET Now: Fertiliser stocks are hogging limelight following the approval of gas pooling policy for the sector. Would it just be another flash in the pan rally?

Prakash Diwan: We could see some buying especially in the stocks Zuari and FACT, which are all set to benefit out of this pooling policy. One must note that it is the change in policy stance that is important rather than the announcement on the gas pooling itself.

The government understands that fertiliser is a sensitive area. It needs to get things right before the monsoon arrives. Otherwise, any measure to rationalise the imbalance between urea and complex fertilisers would be meaningless. The problem had been mounting subsidy burden on the goverment.

The market was muted on Wednesday, which may have capped the fireworks on the fertiliser counters. I was expecting things to be much more volatile, much more intense on fertiliser counters.

Among fertiliser stocks, we have seen UPL surging, even though it has nothing to do with urea.

It is a very promising area. With the productivity on food being one of the inflation-linked elements, and now that RBI is targeting inflation, it will soon realise that the weak part is the food inflation.

The apex bank may have to look at the side rather than the demand part. Therefore, we will see a lot of modernisation on food supply front.
The entire pack of the Jain Irrigation and the EPC Industries of the World and and stocks of insecticides and fungicide should gain.