Fertiliser stocks FACT, RCF, GSFC and others jump up to 20% on MSP hike

Agri-related companies, including fertiliser stocks, surged in Thursday's trade on optimism over MSP hike. Shares of FACT hit 20% upper circuit limit. Other stocks like RCF, National Fertilizers, and Chambal Fertilisers gained 3-19%.

A Ksheerasagar
Published20 Jun 2024, 01:34 PM IST
Trade Now
Analysts have also turned optimistic on fertiliser stocks, stating that the sector is showing early signs of leadership within the high-beta sector after experiencing a mixed performance in recent years.
Analysts have also turned optimistic on fertiliser stocks, stating that the sector is showing early signs of leadership within the high-beta sector after experiencing a mixed performance in recent years.(HTPHOTO)

Agri-related companies, including fertiliser stocks, witnessed a sharp uptick in share value in Thursday's intraday trade, driven by market optimism over the MSP hike. Shares of FACT (The Fertilisers and Chemicals Travancore) were locked in the 20% upper circuit limit at 1,093 apiece, resulting in a gain of nearly 71% in just 11 sessions. 

Similarly, other stocks such as Rashtriya Chemicals & Fertilizers, National Fertilizers, Madras Fertilizers, Chambal Fertilisers & Chemicals, Gujarat State Fertilizers & Chemicals, Paradeep Phosphates, Zuari Industries, and Coromandel International have all gained between 3% and 19% in today's intraday trade.

Also Read: GSFC share price rises 7%: Prabhudas Lilladher expects more than 20% upside for the stock

Investors anticipate that the rise in MSP will enhance farmers' purchasing power, thereby stimulating their investment in agricultural inputs like fertilisers. 

The Union Cabinet on Wednesday announced the minimum support price (MSP) for 14 Kharif-season crops, including paddy, ragi, bajra, jowar, maize, and cotton.

The MSP hike, projected to have a financial implication of two lakh crore for the government and expected to result in an estimated gain of 35,000 crore for farmers compared to the previous season, is aimed at significantly boosting farmers' incomes and improving their economic conditions. 

The increase in MSP ranges between 1.4% and 12.5%, with paddy, the most widely cultivated crop, seeing a notable 5.35% rise in its MSP. The highest absolute increases have been recommended for oilseeds and pulses. 

Also Read: MSP hike likely to benefit FMCG, auto, banking and consumer stocks

The MSP hike announcement has also boosted stocks in other sectors such as FMCG, consumer durables, and auto, with the Nifty FMCG, Nifty Auto, and Nifty Consumer Durables indices currently trading with gains of up to 0.50%.

Notably, today's gain in fertiliser stocks marked the second consecutive increase, following a strong performance in the previous trading session amid reports of potential GST relief. Reports suggest that the GST Council, in its meeting scheduled for June 22, may offer some respite to fertiliser companies from retrospective tax demands.

‘Preparing for a big rally’

Analysts have also turned optimistic on fertiliser stocks, stating that the sector is showing early signs of leadership within the high-beta sector after experiencing a mixed performance in recent years.

Also Read: Stocks to buy: NOCIL to Axis Bank - ICICI Direct suggests 5 shares for this week

The fertiliser sector is preparing for a big rally as there is bullish structural confirmation in the long-term charts of select fertiliser stocks that are catching strong attention, said domestic brokerage firm Nuvama Institutional Equities.

The basket of fertiliser stocks has formed higher tops and bottoms on the medium-term charts, indicating a probable trend change and resumption of the uptrend. The overall outlook appears positive, suggesting a major uptrend will unfold in the coming years, with a new sector likely to emerge from the PSE space, as highlighted by the brokerage. 

Nuvama has identified three fertiliser stocks—Chambal Fertilisers & Chemicals, National Fertilizers, and Rashtriya Chemicals & Fertilizers (RCF)—and has issued 'buy' recommendations for each.

Also Read: Stocks to buy: Three fertiliser stock picks with up to 113% upside potential

It has a first target price of 580 and a second target price of 765 on Chambal Fertilisers. Similarly, it has set a target for National Fertilizers shares, with a first target of 185 and a second target of 255 per share. Additionally, RCF shares have a first target price of 275 and a second target price of 370.

 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Catch all the Budget News , Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess

News in Numbers

Numbers that help you understand news better
3.4 M

51.25%

$1.2 B

$50 M

First Published:20 Jun 2024, 01:34 PM IST
HomeMarketsStock MarketsFertiliser stocks FACT, RCF, GSFC and others jump up to 20% on MSP hike

Most Active Stocks

Bharat Electronics

301.50
03:56 PM | 23 JUL 2024
-11.1 (-3.55%)

Tata Steel

160.05
03:58 PM | 23 JUL 2024
-0.3 (-0.19%)

Tata Power

416.35
03:58 PM | 23 JUL 2024
-7.9 (-1.86%)

NTPC

382.35
03:58 PM | 23 JUL 2024
8.8 (2.36%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Network 18 Media & Investments

85.30
03:59 PM | 23 JUL 2024
7.2 (9.22%)

Asahi India Glass

699.50
03:29 PM | 23 JUL 2024
55.15 (8.56%)

CE Info Systems

2,455.50
03:59 PM | 23 JUL 2024
193.45 (8.55%)

Borosil Renewables

518.25
03:49 PM | 23 JUL 2024
39.35 (8.22%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    75,195.00-315.00
    Chennai
    75,122.00-535.00
    Delhi
    75,048.00-169.00
    Kolkata
    75,561.00417.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.75/L-0.23
    Kolkata
    104.95/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanBudget