Moneycontrol
Last Updated : Apr 28, 2018 10:34 AM IST | Source: Moneycontrol.com

Buy GNFC, target Rs 552: Equity99

On the back of record production of TDI and non-TDI products and capacity utilisation, coupled with jump in exports, GNFC has posted a 38 percent growth in its net profit for the fourth quarter and 51% rise in net profit for the FY18, says Sumit Bilgaiyan, Founder of Equity99.

 
 
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Sumit Bilgaiyan

Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) is a diversified company with business in chemical and fertilizer segment. The company is continuously focusing on increasing its capacity additions in chemical segment and improving capacity utilization of its Dahej Plant.

The company reported stupendous set of 4QFY18 numbers on all counts both on a yearly as well as on a quarterly basis. It has paid off the Rs 888 crore of long term debt it had at the start of the year 2017-18 now company plans to reduce its working capital requirements substantially as well. Roughly, 65 percent of GNFC's revenue comes from chemicals, while 35 percent comes from fertilizers.

On the back of record production of TDI and non-TDI products and capacity utilisation, coupled with jump in exports, GNFC has posted a 38 percent growth in its net profit for the fourth quarter and 51% rise in net profit for the FY18.

Given the management’s focus on maintaining its growth and its higher margins, we feel the stock is a buy at CMP with target of Rs 552.

Disclaimer: The author is Founder of Equity99. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Apr 26, 2018 11:13 am
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