Overview

Rashtriya Chemicals and Fertilizers Limited (RCFL) is a leading fertilizers and chemicals manufacturing company with about 75% of its equity held by the Government of India. Company has been accorded the coveted “ Miniratna ” status in 1997.

RCF has two operating units: one at Trombay in Mumbai and the other at Thal , Raigad district, about 100 KM from Mumbai. RCF manufactures Urea, Complex Fertilizers, Bio fertilizers, Micro nutrients, 100 per cent water soluble fertilizers, soil conditioners and a wide range of Industrial Chemicals. RCF is operating a two Sewage Treatment Plants (STP) at Trombay unit. Both plants put together has a capacity to treat of 45.50 MLD (Million Litres per Day) of Municipal sewage and produce 30 MLD (Million Litres per Day) of treated water for our industrial use.

RCF has set up GT HRSG (Gas turbine with Heat Recovery Steam Generation) plants both at Trombay and at Thal units. With this process, RCF generates power required to meet its captive requirement.

Outlooks and Triggers

• The most awaited new project of RCF is to be commissioned by September 2023 with an estimated project cost of Rs. 13,277.21 crores.
• For revival of Fertilizer Corporation of India Ltd.’s (FCIL), Talcher plant a JV of GAIL, RCF, CIL & FCIL namely “ Talcher Fertilizers Ltd.” has been incorporated and the Urea plant of 1.27 Million tonne per annum capacity is proposed to be set up with Coal as feedstock.
• Rashtriya Chemicals & Fertilizers (RCF) said that it had received approval from the Department of Fertilizers (DOF) for setting up 1200 MTPD DAP/NPK plant at RCF’s Thal unit with the estimated project cost of Rs.914.58 crores.
• Unlocking the value of 750 acre of land bank is icing on the cake.

Valuation and View

RCF reported robust June 2022 quarter with 107% rise in sales and 115% rise in operating profits. Company’s EPS
rose from 3.76 to 5.43 and TTM EPS stands tall at 14.40. Big expansion plans in progress gives long term visibility to the outlook of the company. With current PE of 7.30 and such big ambitious plans, RCF qualifies as an attractive
investment bet. We recommend to buy the stock and may raise targets in future as per the progress of plans.

Disclaimer

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For enquiries, contact:
ROHIT MEHTA
SEBI REGISTERED RESEARCH ANALYST
INH100009080
Mobile No. 8194864567