N Sheth bullish on fertiliser space

Nirav Sheth, Head-PMS, BRICS Securities is bullish on fertiliser space over the long term.

Sheth told CNBC-TV18, "We have had a look at the fertiliser sector and we are bullish over the longer-term. We are always of the view that given the fact that the sector is completely starved of capital, it’s high time that the policy changes are made to attract capital and large part of the policy changes should be driven by the fact that eventually it will be a gas long scenario in India. Apparently our understanding recently has been the fact that while policy changes are expected there is likely to be some sort of competitive bidding for setting up capacities and if we get into the stage of competitive bidding wherein one will have to bid relative to the import parative prices then that will cap eventually supernormal returns. So as to say for the sector and therefore we would wait for some more policy clarification before trying to take a view because whatever is going to happen in fertiliser sector in terms of earnings will happen some couple of years away. It takes about 18 months to setup a capacity. So it is too fast to react."

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