Rajen Shah bullish on fertilizer sector

Rajen Shah, Angel Broking is bullish on fertilizer sector.

Shah told CNBC-TV18, “Fertilizer sector, disappointed at the pace at which the government is functioning but certainly the long term prospects of the fertilizer industry is immense actually. Infact two days back Times of India had the headline that vegetable prices at record high.”
He further added, “I continue to remain bullish on this agricultural space, we have been bullish for the past 3 years and we’ll continue to remain bullish for as many years. So fertilizer companies are going to do very well in the coming years. No doubt these all things what is happening right another government policy asset some times seats at the meeting and doesn’t act actually. These all things will continue but net-net I think that these companies will do exceedingly well in the coming years. And some of the companies you are getting at very decent valuations. Mangalore Chemical, there are two triggers, one is the valuation. Rs 6 earnings it reported this year. It should report about Rs 6 earnings, stock is at 7 PE multiple. Probably Vijay Mallya could sell off this company. It’s the only fertilizer company in Karnataka and the market cap is less than Rs 500 crore.”
“So Coromandel or Zuari could take it over and Vijay Mallya would happily sell it at price of above Rs 75-80. So this stock is a short 100% upside in two years and similarly EID Parry, it owns stake in Coromandel international. The value of its stake is more than the market cap of EID Parry and you are getting the sugar business for free. So plenty of opportunities are there. But since the market sentiment is poor these stocks may continue to languish at these levels for a while. But certainly a great opportunity lie in this sector."