Nagarjuna fertilizer - Re-Rating Candidate

Biggest Advantage to this urea manufacturing company in kakinada port is its proximity to KG Basin & all the pipe lines has to go through this area.
Till date naphtha and APM gas are being used as raw material, which are considerably expensive. Also due to Government subsidy, Nagarjuna fertilizer is facing a loss of almost 25 crores. More ever the company has two loss making subsidiaries Nagarjuna Power Corporation in Mangalore & Nagarjuna Oil Corporation in TN which is affecting the balance sheet drastically.

Raise of hopes are being seen in this counter, as company has appealed for permission for using gas as raw source instead of the other two expensive alternatives. Also Reliance has proposed a long term contract for gas supply. Only hiccup is both the things require Government permission.
The company is also planning to sale the stake in the loss making companies to the biggies of the Indian Industries, Reliance & TATA.

All this above factors & the interest shown by the likes of Big R – a Fundamental Bull, can change the equations for this counter. For years, Nagarjuna Fertilizer was languishing below 20 & now maybe in a year it can double from here.
So do watch this re-rating candidate as it has moved out of his band with a bang.

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