“The government has implemented Direct Benefit Transfer (DBT) system in fertiliser sector under which subsidy is released to the fertiliser companies on weekly basis, on the basis of actual sales made by the retailers to the beneficiaries through Point of Sale (PoS) devices installed at each retailer shop”
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Looks like the sales are going to be spectacular this quarter.
Only SSP was the outperformer in March.
Coromandel did exceptionally well. I hope Khaitan did not lose the market share to Coromandel.
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Govt asks companies not to hike non-urea fertilizer prices, look for alternative to expensive raw materials - Times of India Govt asks companies not to hike non-urea fertilizer prices, look for alternative to expensive raw materials - Times of India
The Centre on Friday directed fertilizer companies not to increase the maximum retail price (MRP) of non-urea fertilizers such as DAP. It has suggested they look to alternatives such as single superphosphate and bio-fertilizer rather than importing expensive ingredients considering the spike in their prices in the international market.
If this actually happens we could see spectacular rise in sales in the next Q1 & Q2.
Can anyone who has contacts in the industry confirm if SSP is seeing a pickup? The prices were obviously on a rise in March(might be attributable to higher demand).
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A couple of questions that come to my mind. Jay_Shah, RajeevJ, would be great if you can review and respond.
- This is a regulated industry where price cannot be hiked much even if the raw material cost goes up. How do you see this risk playing out and company’s ability to handle this?
- Share of raw materials costs had reduced from 2009 till now. Do we know how is company able to do this, while volumes have not changed significantly?
- Raw material is mostly imported. If they have to pay in dollars, historically INR has only depreciated against US dollar. With this being a regulated industry, how will they manage this “inflation”?
- Do you see their volume increasing over a period of time? They have spare capacity, which they dont seem to have used for some time now.
- How is their distribution network? Scaling up production probably is the easier part, scaling up distribution will be hard.
I have no investment at the moment - just started looking at the company. Any insights will be really helpful.
4 Likes
Tomorrow is the results day and highest volumes traded today. Key trigger is the management said they will clear the debt . I am guessing results are going to be bumper
Would like to know experts comment regarding the result.
- Dividend of Re.0.15 per equity share
- The Company has prepaid its entire Term Loan and Corporate Loan of State Bank of India and IDBI as on March 31, 2021.
- As a consortium lead Banker, the State Bank of India has agreed to release of 8,00,000 Pledged Shares of Khaitan Chemicals and Fertilizers Limited held by Promoter Shri Shailesh
Khaitan vide their sanction letter dated 03.11.2020. - The State Bank of India has further agreed to release of 3,79,95,680 Pledged Shares of Khaitan Chemicals and Fertilizers Limited held by Corporate Guarantor Shradha Projects
Limited vide their sanction letter dated 30.04.2021. Pursuant to the release of the above stated shares there will be no shares pledged by the promoters with the banks and
financial institutions
5 Likes
QoQ result has not met expectation though.
Hope the momentum continues in current FY.
Do you see any triggers other than previous years operations.
Soya Business is loss making although Soya Oil prices are trading higher.
Recently taken position and yet to dig deeper.
1 Like
The Q4 results are a disappointment. Even though Sales have grown about 10% in Q4, the profits have fallen from about 6 crs, both in the preceding qtr as well as the corresponding Q4, to a mere 1.09 crs. The Co. has not given any reason for the subdued results, but it is clear that the margins are under pressure due to higher raw material prices.
The pledged shares have been released which good news. The final dividend of 15% takes the total dividend for the year to 25%, which is a huge jump from 10% earlier. If only the Q4 numbers had been in line! We will need clarity on whether the margin pressure was a one off in the Q4 or is it continuing.
9 Likes
In line with 140% increase in subsidy of DAP fertilizer from s. 500 per pag to Rs. 1.200 per bag, a similar subsidy incrase on SSP fertilizers too have been announced from Rs. 2,500 per ton to Rs. 7,300 per ton. This would be hugely beneficial for Co.'s like Khaitan.
8 Likes
RajeevJ, it would be much appreciated to know your view right now about the co. Sep quarterly results where really good and the company seems to do better despite the delayed monsoon in southern states. Waiting to learn more about your views in the coming days.
1 Like
Hi,
Has anyone been tracking the co. lately? I’m only seeing a rise of traders only commenting on the breakout, no business commentary.
@RajeevJ sir, given that there are tailwinds coming for the agro-chem space, with demand rise and doubled subsidy, is it possible that this is the start of runway for further growth?
Also, I can see that there is a big dip in sales in this March quarter like every year(Cyclicality). Don’t know if I should be concerned as the management hasn’t provided commentary. Views?
@Jay_Shah, Is there a way to know if it did?
Any other questions, views, or criticism are welcome.
Disc: Invested(5% allocation)