GSFC and Zuari Industries are the top picks, says Tarun Surana, Research Analyst (Institutions), Sunidhi Securities.
Surana told CNBC-TV18, "We have our top picks as GSFC and Zuari Industries. Both these companies are primarily complex fertilizer companies. Though I have my worries on the complex fertilizer for next two quarters, the valuations of these companies are very attractive. GSFC and Zuari both are trading at around four and five times on PE multiples respectively, whereas the sector leader Coromandel is still getting PE multiple of about 11 times."
He further added, "I believe that this gap will narrow down ultimately. Either Coromandel derates to some extent because of all these worries and while all these worries are there, the worries are more than factored in in price of GSFC and Zuari. So I would advice a buy on GSFC and Zuari, would recommend hold on Coromandel, whereas urea based stocks are typically a policy play. Once we get closer to policy finalization which is attractive enough to bring in investments at that point of time I would recommend investors to buy RCF or Chambal as well."
