RCF Analysis - Don't miss this opportunity

babutaaniket Updated   

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  • If sanctions over Russia are withdrawn then it may have a negative impact on Indian fertilizer companies.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.

Trade active:
Broken the resistance line. 100 achieved. 125 next target.
Trade active:
23/04/2022: CMP 107
Trade active:
CMP 169


The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.