RCF Analysis - Don't miss this opportunity

Apr 2, 2022

RCF

EDIT- 1st, 2nd, 3rd, 4th and 5th indicates attempts to break the trendline and not the date. The dates ( in MM/YYYY) are written below the attempt number.

Rashtriya Chemicals and Fertilizers Limited (RCF) manufactures and markets various kinds of fertilizers such as urea, bio-fertilizers, micro-nutrients, water soluble fertilizers, soil conditioners etc.

• TTM EPS: 11.28
  
• TTM PE: 8.39
  
• Sector PE: 17.42
  
• Book Value Per Share: 60.42
  
• P/B: 1.57
  
• Face Value: 10
  
• Mkt Cap (Rs. Cr.): 5,218
  
• Dividend Yield: 3.15
  

Some Positves:

• Rising Net Cash Flow and Cash from Operating activity
  
• Company with high TTM EPS Growth
  
• Strong Annual EPS Growth
  
• New 52 Week High
  
• Effectively using its capital to generate profit - RoCE improving in last 2 years
  
• Effectively using Shareholders fund - Return on equity (ROE) improving since last 2 year
  
• Efficient in managing Assets to generate Profits - ROA improving since last 2 year
  
• Increasing Revenue every Quarter for the past 4 Quarters
  
• Strong cash generating ability from core business - Improving Cash Flow from operation for last 2 years
  
• Company able to generate Net Cash - Improving Net Cash Flow for last 2 years
  
• Annual Net Profits improving for last 2 years
  
• Book Value per share Improving for last 2 years
  
• Company with Zero Promoter Pledge
  
• FII / FPI or Institutions increasing their shareholding
  
• Stock gained more than 20% in one month
  
• Strong Momentum: Price above short, medium and long term moving averages
  

Some Negatives:

• Over the last 5 years, revenue has grown at a yearly rate of 0.23%, vs industry avg of 7.19%
  
• Over the last 5 years, net income has grown at a yearly rate of 17.29%, vs industry avg of 31.88%
  
• Over the last 5 years, market share decreased from 8.45% to 6.02%
  
• If sanctions over Russia are withdrawn then it may have a negative impact on Indian fertilizer companies.
  

My Opinion: GoI is selling stake in RCF & NFL to reach Rs 23k crore disinvestment target. The company has double cash reserve than debt. Russia and Ukraine produce around 20-25% of global fertilizer production. The supply has taken hit and this presents a good opportunity for Indian companies. The volume indicates that the price will breakout the trendline this time. First target 100 above that 135-140 is very much possible in next 3 months.

NOT A RECOMMENDATION. JUST FOR EDUCATION. Thanks.

Apr 6, 2022

Trade active

Broken the resistance line. 100 achieved. 125 next target.

Apr 23, 2022

Trade active

23/04/2022: CMP 107

Jan 9

Trade active

CMP 169