Sell-off seen in Fertiliser stocks post budget announcements. Here is why.

Shares of FACT and GSFC also witnessed profit booking and are trading down by 2 percent and 3 percent respectively.

Yogesh Supekar

February 01, 2024 / 15:05 IST

Budget

The shares of fertiliser companies are seen trading with deep cuts post-budget announcements on February 1 trading session. The budget allocation to the fertiliser sector has been reduced to Rs 1.68 Lakh crore from the previous budget allocation of Rs 1.75 lakh crore.

RCF shares are down by ~4 percent, National fertiliser shares slip by 4.5 percent, Deepak Fertiliser shares dip by more than 4 percent and Chambal Fertilisers weaken by more than 1 percent. Shares of FACT and GSFC also witnessed profit booking and are trading down by 2 percent and 3 percent respectively.

Coromandel International shares are trading with minor gains after posting heavy losses in the past three trading sessions. Coromandel Internal reported a sharp drop in Total Income (34 percent) and in the PAT (55 percent) on a YoY basis.

The capital allocation is being reduced for the sector to Rs 1.68 lakh crore from the previous budget allocation of Rs 1.75 lakh crore Fertiliser stocks also are expected to be under pressure owing to the cap on the profit margins being advised by the Department of Fertilisers (DOF).

As expected the current interim budget focused on fiscal consolidation and the capital allocation to defence, railways, and infrastructure projects increased marginally. Inspite of a marginal increase in the capital spending for railways, profit booking is seen in the Railway stocks while the green energy stocks are witnessing an uptrend.