Coromandel Int, Chambal Fertilizer good bets: Angel Broking

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Coromandel Int, Chambal Fertilizer good bets: Angel Broking

Coromandel Int and Chambal Fertilizer are good bets in fertilizer space, says Rajen Shah, CIO, Angel Broking.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Rajen Shah See what other Experts & Brokerages are saying about Coromandel Int See messages about Coromandel Int

Coromandel Int and Chambal Fertiliser are good bets in fertilizer space, says Rajen Shah, CIO, Angel Broking.

Shah told CNBC-TV18, "Fertilizer space, I rarely go through all these news thing which are happening because every second month we hear that there is a meeting on the fertilizer policy and this kind of these all. I just go by the demand-supply and currently let me tell you that I was interacting with certain agro chemical companies and certain friends of mine who own some agricultural land banks in south actually and what I have realized is fertilizer demand is exceptionally high actually. There is a serious shortage of fertilizers and that is what I go be and that personally the reason why I have been bullish on this space for the past three years. I am not concerned about the policy because the thing is that hardly any investment has gone into the fertilizer industry for the past so many years because of non-remunerative prices and because of the government policy."

He further added, "If you see the inflation the government talks about brining down inflation to 7% I fail to understand how can you bring down the food inflation by increasing the interest rates. If you really want to bring down food inflation you go onto increase the agricultural output and the best way to increase agricultural output is actually creating huge capacities for fertilizers and all that. So I think the government has to sooner or later bow down to the demand of this industry and that is going to lead to higher production of fertilizer and obviously that will result in higher crop production and that will ultimately lead to lower food inflation. So the solution is not increasing interest rates but actually boosting crop output."

"So I think long-term prospects of this industry no matter what happened in the short-term I think these all stocks are going to be multi-baggers and many of the stocks like Coromandel, Chambal and Mangalore Chemical in particular because Mangalore has got a different story because the way Kingfisher is waiting and probably you could also see a sell out happening, probably that's a call actually we are taking because of what's happening with Kingfisher and all that. So interesting players in the fertilizer space."

Disclosure: It is safe to assume that we have positions in all the stocks discussed.