'New government policy to improve outlook of fertiliser stocks'

ET spoke with Nischal Maheshwari, head research, Edelweiss, to get his views on the outlook of fertiliser stocks.

What is your view on fertilizers? Do you think it's a good space to get into or would you stay away?

No. When we look at fertilizer, there is two clear spaces out there - one is 90% of the market which is the urea space the nitrogen base fertilizer and the other two fertilizers that is potassium and phosphorus basically constitute the remaining 10%. If you remember a quarter back government came out with a very clear view on how it gave some price freedom to the sellers of the potassium and phosphorus based fertilizers. Now, the government is looking at a very comprehensive policy on nitrogenous fertilizers basically which is urea. If you step back and look at it for the last 10 or 12 years, no fresh investments happened in the space and India has a deficit of close to 4-4.5 million tonnes of urea which spikes the prices whenever they go out to import it. So, the government is very keen that fresh investment should come in and comprehensive policy to attract investment is likely to be announced in the next 15 days to one month and I believe that is going to be pretty positive for all the urea manufacturers. It is going to definitely improve returns power of them and that is what it is getting reflected in stock prices.