This fertiliser share will cost you just over Rs 50: Here's why you should buy
Rashtriya Chemicals & Fertilizers (RCF) belongs to the Rs 50 category of shares that can be one of the best options for investment, according to a Zee Business TV report.
With the recent government decision to slash Corporate Tax rate, that will cost the government about Rs 1.5 lakh crore, to spur positive sentiments in a depressed economic scenario, has also had an impact in another segment - it has created demand for PSU shares in the market. Of these PSU stocks, Rashtriya Chemicals & Fertilizers (RCF) belongs to the Rs 50 category of shares that can be one of the best options for investment, according to a Zee Business TV report. It added that with 75% stake of the government, the firm is likely to be part of the strategic divestment plan.
With introduction of Direct Benefit Transfer (DBT) for fertiliser firms, the RCF holds great value in terms of its future growth as the DBT will help it in lessening its debt, said the report, adding the payment of about Rs 20,000 crore subsidy amount is still pending for fertiliser firms would also help RCF in paring its losses.
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This will not only increase its working capital but will also add to its volume growth, especially in the wake of good monsoon. Notably, the government plan to double the farmers income by 2022 is another trigger for the RCF, which also has 800 acres of surplus land at Chembur in Mumbai. With a market cap of Rs 2800 crore, the firm has a value of Rs 10,000 crore at a conservative estimate, said the report.
The company is stated to be financially and fundamentally strong, but the only risk factor is a delay in getting the subsidy, which will gradually come down with the introduction of DBT, which will boost its prospects, the report said, adding that it has the possibility of re-rating.
With the possibility of re-rating, the stock can be bought at the price of Rs 53, which would be an ideal entry point, according to the expert advice available on the Zee Business TV.
Notably, the NDA government is likely to make big announcements on strategic divestment of public sector undertaking (PSUs) in the Cabinet meeting slated next week. In an exclusive report, Zee Business TV has revealed that the Shipping Corporation of India (SCI) can be on the list. The report cited sources in the Union Shipping Ministry.
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