STARTING NEW VENTURE BY NEW FINANCIAL YEAR
PORTFOLIO BUILDING
FIRST STOCK WE PICKED FOR PORTFOLIO BUILDING
The company deals with fertilizers like urea, Diammonium phosphate, granulated fertilizers, liquid fertilizers, soil conditioners, Muriate of potash, soil micronutrients, speciality fertilizers, food grade Ammonium bicarbonate, industrial chemicals like Sulphuric acid and Sulphonated granulated fertilizers. The marketing offices of MCF are located in Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Telangana and Maharashtra.
Story:Mangalore Chemicals and Fertilizers has a 1,100 tonne per day urea plant that is about 380,000 per year, and about 800,000 tonne per day complex fertilizer plant with captive 35 megawatt power generation capacity. The equity base is very low for the company at Rs 120 crore and the company EXPECTED to posted an EPS of about Rs 5.50 for the FY2018.Apart from that, the company has huge surplus land at Mangalore.
If you take the western coast, there are no large fertilizer plants in Karnataka or beyond. In Goa you have Zuari Agro, in Maharashtra, you have RCF. The combination of urea and complex fertilizers is seen in very few like with Tata Chemicals and GSFC. In general, either you have a standalone urea manufacturer like Indo-Gulf, Chambal Fertilizer, or you have a standalone complex fertilizer maker like Coromandel International.
But this is a combination of both which in today's time, makes it a very interesting play.
So again this is a very interesting play available in the fertilizer space. A combination of all this makes it a good buy. But one has to keep a view of 12 to 18 months on the stock. Our Target Rs. 150+ double from current Valuations.
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