TDI, i.e. Toluene diisocyanate prices have surged sharply over the past few days, a huge positive for Gujarat National Fertilizer Company, a Gujarat state-owned fertilizer and chemical company and the only producer of TDI in India. TDI is a chemical used mainly for flexible foam applications including furniture, bedding and carpet underlay, as well as packaging applications.
GNFC share price has more than doubled in the last six months, after the quick rise in TDI and could see further investor interest with the recent development.
The selling price of TDI by GNFC in the month of September was around Rs 150-160 per kg, which was then revised to Rs 191 in the first week October. The dealers and other importers like BASF are selling the chemical at Rs 220-240 per kg, which will give extra headroom for GNFC to take price hikes for its product.
In today’s trade GNFC share price traded at the new 52 weeks high of Rs. 214.90.
The company owns a TDI plant of 67,000 tons per annum, set up a few years ago to swap imports. In FY16, the company reported a loss of Rs 350 crore in TDI business when the standard TDI prices were around Rs 110 per kg and its capacity utilization was around 60-65%. Breakeven for the business is at approximately Rs 142 at 80% capacity utilization. The plants are currently running at 100% utilization.
Meanwhile, at 1:56 PM, GNFC share price is trading at 212.45 with the rise of almost 10%.
Total profit for the company in FY16 was Rs 225 crore together with the Rs 350 crore losses in TDI. Analysts were anticipating the company’s profits to more than double for FY17 at a standard price of Rs 160. With TDI prices going up, the earnings estimate for the current financial year could be again revised by the analysts.
On Thursday, GNFC’s stock closed at Rs 186.5, 2.44% higher than the previous close despite Nifty falling by over 1.5%.
According to sources, the Indian government has also started anti-dumping inquiry concerning imports of TDI originating from China and Korea. GNFC is the petitioner.
GNFC is the Multibagger for the month as identified by Dynamic Levels. For the details on the stock, visit GNFC share price history page of Dynamic Levels.
No comments:
Post a Comment