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Zee Business Managing Editor Anil Singhvi on Tuesday recommended to Buy Gujarat Narmada Valley Fertilizers and Chemicals (GNFC) Futures for bumper returns. He also highlighted key triggers for recommending the share.
The Market Guru suggested GNFC Futures at a current market price of Rs 738 per share. He said that the small target would be Rs 750/755 apiece.
Singhvi, however, suggested to hold the stock for the target of Rs 775/800 per share with the stop loss of Rs 720 per share.
As per Singhvi, the production of Toluene Diisocyanate (TDI) chemical has fallen in Europe. Besides, BASF’s Germany plant has also cut production by 50 per cent. The production slump is mainly due to the rise in fuel prices, as European companies are unable to run plants smoothly, he added.
TDI is used to make many household products. It is mixed with other chemicals to produce various polyurethanes. Some of the products made with these polyurethanes include foam for furniture cushions, carpet padding and waterproof sealants.
This decline in production will have a direct and positive impact on GNFC as it is the only Indian company to produce TDI chemicals, he said. The fertilizer and chemical company has lately hiked prices by 5 per cent and is mulling to increase more between 5-7 per cent.
Ahead of the Budget, the company’s share price has given positive returns 9 out of 11 times, the Managing Editor pointed, adding that during one such Budget, the company had reported a surge of 26 per cent in its price.
Citing another important trigger for GNFC, he said that Germany’s Rhine river water level has fallen below sailing estimates and due to this the ships are not able to cross the river, also impacting the BASF plant in Germany, leading to production decline.
On the back of these multiple negative factors, BASF’s Germany plan will eventually have to shut production, he said.
GNFC share price on Tuesday gained over 3 per cent to end at Rs 749.60 apiece on the NSE. GNFC share has yielded over 28 per cent return in the last 6 months while around 70 per cent in 2022.
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