Short Term Buy Call For Chambal Fertilisers

Stock market analyst Ashwani Gujral has suggested investors to buy Chambal Fertilisers stock to achieve a short term target of Rs 150.

According to him, interested investors can purchase the stock on declines with a strict stop loss of Rs 80.

Today (May 29), the company’s shares opened at Rs 90.20, as against its last closure at Rs 88.45 on Wednesday (May 28), on the Bombay Stock Exchange (BSE). Current EPS and P/E ratio stood at 4.56 and 19.79 respectively. The share price has seen a 52-week high of Rs 94.25 and a low of Rs 32 on BSE.

The company reported a substantial rise in consolidated net profit for the year ended March 2008. During the year, the consolidated profit of the company jumped 69.36% to Rs 2,374.3 million from Rs 1,401.9 million in the previous year. Consolidated total income during the year climbed 9.30% from a year ago to Rs 32,850.4 million.

While on standalone basis, the company reported a substantial rise in standalone net profit for the year ended March 2008. During the year, the profit of the company rose 34.85% to Rs 2,038 million from Rs 1,511.30 million in the previous year. The company reported earnings of Rs 4.90 a share during the year, registering 34.99% growth over previous year.

Net sales for the year rose marginally 4.97% to Rs 27,201.30 million, while total income during the year climbed 7.22% to Rs 28,023 million, when compared with the prior year period.

During the year, the company disclosed a fall in operating margin of 56.08 basis points to 17.01% on higher production cost. Interest cost declined 0.27% to Rs 918.60 million, while depreciation cost rose 4.72% to Rs 1,849.40 million over previous year period.

The board of directors has recommended dividend of 18% on equity shares for the financial year 2008.

Other stocks from the same sector that looks good for short-term and long-term trading includes Nat Fert, GNFC and Nagarjuna Fert.

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