This chemical company stock gave investors 54 per cent returns in just two months; here's why
The stock increased by 53.41 per cent from its 52-week low of Rs 71.85 to Rs 101.10 till today after the decline on June 20.
Shares of Rashtriya Chemical and Fertilizer gapped up today by 7 per cent and closed up by 4.33 per cent at Rs 101.25 from the previous day's closing price. The stock increased by 53.41 per cent from its 52-week low of Rs 71.85 to Rs 101.10 till today after the decline on June 20. The share's 52-week high and low are Rs 113 and Rs 66, respectively.
In February 2022 a pact signed between RCF and Krishi Samagri company guarantees the import of 457,000 metric tonnes of urea and 370,000 metric tonnes of DAP by the fiscal year 2025/26 in February 2022. One of the main issues in Nepal's agriculture industry over the past few years has been a scarcity of chemical fertilizers.
The company's top line has increased at a compounded rate of 13 per cent over the last five years. In the last three years, the operating profit has increased at a CAGR of 31 per cent. Over three years, the net profit has increased at a CAGR of 74 per cent. Despite an increase in earnings per share from Rs 6.8 to Rs 12.7 from FY21 to FY22, the company's PE for FY22 was 7.0x. The company's raw material expenditure as a percentage of sales climbed from 44 per cent in FY 23 to 56 per cent in FY22 which might be a concern for the company.
The company's receivable days fell from 132 days in FY21 to 64 days in FY22, a considerable drop. The ROE and ROCE are respectively 19.5 per cent and 17.4 per cent. For FY22, the company's cash flow from operations was negative. The technical chart demonstrates that the stock has bullish candlesticks, the share price is trading above all short-term SMAs, and the MACD is above the centre line.
Rashtriya Chemicals and Fertilizers Limited (RCF), a ‘Mini-Ratna’, is a leading fertilizers and chemicals manufacturing company with about 75 per cent of its equity held by the Government of India. It has two operating units, one at Trombay in Mumbai and the other at Thal, Raigad district, about 100 km from Mumbai. RCF manufactures Urea, Complex Fertilizers, Bio-fertilizers, Micro-nutrients, 100 per cent water soluble fertilizers, soil conditioners and a wide range of Industrial Chemicals.