Buy Deepak Fertilisers at current prices: Nayyar

Himanshu Nayyar, analyst Agri Sector of Quant told CNBC-TV18, "I would say that in the longer run, Deepak Fertilizers and Petrochemicals Coprn would be a good stock to buy at current prices. In any case it is trading at 0.6 times with not a lot of debt."

"There were concerns on high ammonia prices but in the current environment we have seen ammonia prices correct by 20-25 percent. That would help improve their chemical business margins and purchasing asset like Mangalore Agro Chemicals which would also give them much stable earnings because urea companies tend to report very stable earnings and not very volatile like complex fertilisers. So their earnings profile will become more stable, they will become majorly a fertiliser company than a chemical company," he added.
"Overall I can see some sort of rerating for Deepak Fertilisers and Petrochemicals Corporation from a one to two years perspective. Currently, the stock is trading at just about six times earnings and if they become majorly a fertiliser entity, you can see their multiples move up anywhere close to 9-10 times from six times currently." Also Read: Deepak Fertilizers up 4% on stake buy in Mangalore Chemical