Fertiliser stocks extended their upward trend during Monday's intra-day trade, by reaching new one-year highs, with some breaking records after rising 30–60% in a week. The significant surge in the stocks came after Russia planned to set its export tax for all types of fertilisers at 23.5% when the price was more than $450 per tonne, according to media reports.
In addition, there are expectations of a rise in urea subsidy by the government in the upcoming budget. The current urea subsidy is ₹266 per kilogram, which the government may increase to ₹288, according to CNBC TV18, citing sources.
The hope for higher subsidy follows the recent spike in fertiliser prices due to supply constraints and higher global prices.
The fertiliser subsidy bill is expected to be over ₹2 lakh crore for this financial year, while the same stood at ₹1.62 lakh crore in the previous fiscal, the report said.
Five fertiliser stocks had a 36–112% increase in one month as a result of the encouraging trend. Fertilizers and Chemicals Travancore Ltd (FACT) was the top gainer in the space, with gains of more than 68.5% in the last week alone.
During Monday's trade, the stock rose 10% to hit a new 52-week high of ₹295.4 in the early trade, the stock, however, lost ground and ended the trade at ₹266.10 apiece.
|Scrip Name||% Monthly Returns|
|Fertilizers and Chemicals Travancore||112|
|Agro Phos India||46.9|
|Nagarjuna Fertilisers & Chemicals||42.5|
|Rashtriya Chemicals & Fertilizers||36|
In the last one month, the stock has doubled investors' wealth by rallying from ₹125.05 apiece to the current level of ₹266.10, generating a return of 112%. Over the last three years, the stock delivered a tremendous return of 600%, and in the last five-year period, it produced a return of 477%.
The second-highest gainer in terms of monthly returns was Madras Fertilizers, the stock has increased by 89.1% in a month, about 39% of those gains have come in the past week. On Monday's intraday trade, the stock reached a new lifetime high of ₹94.6 per share.
In the last one year, the stock delivered a staggering return of over 225 per cent, rising from ₹26 apiece to the current level of ₹84.60, while the stock has delivered an astounding return of nearly 348.81 percent in the last three-year period.
In the recent September quarter, the company recorded its highest-ever sales at ₹914.9 crore, a growth of 138.2% compared to ₹384.2 crore in Q2 FY22.
Similarly, shares of National Fertilizers set a new one-year high in Monday's trade. The stock began the trade strongly at ₹79 apiece as against the previous close of ₹75.90 and continued the momentum to hit a 52-week high of ₹82.45 apiece. Finally, the stock ended the trade at ₹77.50.
The stock, which increased from Rs. 49.20 to Rs. 77.50, has achieved a stunning return of over 33.3 percent in a week and over 57.50 percent in the past month.
On the other hand, other stocks, including Agro Phos India, Nagarjuna Fertilisers and Chemicals, and Rashtriya Chemicals & Fertilizers also witnessed a sharp rally in the past month, with returns of over 46.9%, 42.5%, and 36%, respectively.
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