Monday, October 24, 2016

Chambal Fertilisers and Chemicals Limited @ 62.65

1. Chambal Fertilisers and Chemicals Limited is a 10 rupee face value diversified company. 
Security ID : CHAMBLFERT  Group / Index : B / S&P BSE 500  Face value : 10.00  Security Code : 500085  ISIN : INE085A01013  Industry : Fertilizers.
Brief Details of Company: - Chambal Fertilisers and Chemicals Limited has two divisions, three subsidiary and one joint venture so in future this stock has an excellent chance to the demerger , 
Here are the details of Chambal divisions:-
1. Agri Divison: -Chambal Fertilisers and Chemicals Limited is one of the largest private sector fertilizer producers in India. It was promoted by Zuari Industries Limited in the year 1985. It's two hi-tech nitrogenous fertilizer (urea) plants are located at Gadepan in Kota district of Rajasthan. The two plants produce about 2 million MT of Urea per annum. The first plant was commissioned in 1993 and the second plant in 1999. These plants use state-of-the-art technology from Denmark, Italy, United States and Japan. The company caters to the need of the farmers in eleven states in northern, eastern, central and western regions of India and is the lead fertilizer supplier in the State of Rajasthan. The Company has a vast marketing network comprising 13 regional offices, 1,700 dealers, and 20,000 village level outlets.
The Company has donned the mantle of providing all agri-products through a 'single window' to enable the farmer to buy all products from one source. The Company dealers offer Urea and other agri-inputs like DAP (Di-Ammonium Phosphate), MOP (Murate of Potash), SSP(Single Super Phosphate), pesticides and seeds. Most of these products are sourced from reputed suppliers and sold under the 'Uttam' umbrella brand. Today, the Company has attained a leadership position in the pesticide business in North India.
2. Shipping Divison: - In 2004, Chambal decided to enter the energy transportation sector and acquired India Steamship Company Limited, one of India's oldest shipping companies.
Today, India Steamship has a fleet capacity of over 4,00,000 DWT in the form of four Aframax tankers.
Ratna Shruti
Ratna Shradha
Ratna Namrata
Ratna Shalini
In line with international shipping standards, all the Aframax tankers are double hull and built in 2008 and later. Three new Aframax Tankers of about 105,000 DWT each joined the fleet between April and July 2008. The latest addition is 'Ratna Shalini' which joined the fleet in the first quarter of 2010. 
The subsidiary of Chambal Fertilizer: - 
 Chambal Fertilizers have three subsidiaries:-
1.Chambal infrastructure venture Ltd: -Chambal proposes to foray into infrastructure related business including the Power Sector. A wholly owned subsidiary of Chambal - Chambal Infrastructure Ventures Limited (CIVL) has been set-up for the purpose. Chambal's endeavor in the power sector would be to build a major integrated power business, across various sectors, including fuel sourcing through coal mining to take advantage of the significant and expanding opportunities in the fast-growing power sector in India.
2.India Steamship Pvt. Ltd Singapore: -A wholly owned subsidiary engaged in the shipping business in Singapore.
3. CFCL Technologies Ltd: -With the aim to enter the software technology market, Chambal Fertilisers set up the India Software Group (ISG) in 1998 as its software arm. In an attempt to further expand in the overseas market, the company soon acquired Novasoft Information Technology Corporation, a New Jersey, U.S.-based company, along with its subsidiaries.
After a decade in the business and years of experience in product development and applications maintenance, the combined entity (ISGN®) decided to focus on providing technology solutions to the U.S. mortgage market to capitalize on its strengths.
The acquisition of MortgageHub Inc, a pioneer of web-based IT solutions and services, enabled ISGN’s plans of restructuring the mortgage industry. With a host of services and a clientele consisting of some of the largest lending organizations in the U.S., MortgageHub added greatly to the range of services offered.
A further expansion occurred with ISGN’s acquisition of the mortgage software division of the Fair Isaac Corporation, a leading U.S.-based enterprise decision management solutions provider for global businesses and Dynatek, a U.S.-based provider of mortgage automation software for retail and wholesale lenders.
Today, ISGN is one of the most diverse and experienced providers of mortgage technology and services. Its industry leading solutions cover the entire spectrum of the loan lifecycle, from origination to settlement services, to support core servicing, loss mitigation, and home retention services. With the acquisition of Fiserv’s Fulfillment Services division, ISGN has expanded to 7 U.S. and two global centers. With 1,000 employees and over 1,000 customers, ISGN delivers business solutions to large global financial institutions, national lenders, credit unions and neighborhood banks.
ISGN has a market reputation for quality and an unwavering focus on the mortgage industry. Since 2005, it has emerged as a formidable transformational leader, delivering exceptional quality and innovative solutions through its flexible and comprehensive suite of mortgage products and services.
Joint Venture of Chambal:-
Indo Maroc Phosphore SA (IMACID):-
Phosphoric Acid is an important raw material in the manufacture of Phosphatic fertilizers. This vital ingredient is in short supply in India. With the country being the largest importer of Phosphoric Acid, there was a clear need to secure captive sources of this chemical.
Initially, IMACID produced 3300 MTPD of Sulphuric acid, making it the largest single stream plant using Monsanto Environ Chem, USA Double Contact Double Absorption Technology Process and produced 1000 MTPD of merchant grade Phosphoric Acid based on Dihydrate Mark IV Process of Prayon Rupel Technologies, Belgium. After debottlenecking in 2006, the production of Sulphuric Acid has gone up to 3800 MTPD and Phosphoric Acid to 1400 MTPD.
Located at the port of Jorf Lasfar, IMACID factory is utilizing the mega infrastructure provided by OCP like a railhead for Rock phosphate and a modern port facility for liquid Sulphur and Phosphoric Acid. Further, IMACID has constructed a power plant of 27 MW Steam Turbo Generator, Water Treatment and Instrument Air system, Storage Tanks and Sea water pumping station to meet its requirements.
2. Year high of Chambal Fertilisers and Chemicals Limited is 73.40 year low was 50.85 and stock traded at 62.65, Year high/ low ratio is  below 2 , So stock is stable for fresh buy., If you are new reader of my blog and not familiar with my research terms, then please see my positional research terms at this link
3. Promoters of Chambal Fertilisers and Chemicals Limited hold 57.34 %  Promoter continue increasing his holdings since Dec 15 from 56.87% to 57.13% now this is 57.34%; I think promoters knew their company very well, so I like increasing promoters holding. 

Promoters pledged his 7.08% shares although promoters pledged shares quantity is very low, but the rule is the rule so due to my rule about pledged share I do not publish this stock on and publish it under trading stocks for 20%+ return only.
See full list of public shareholding including FII and DII here:-
Public Shareholding of Chambal Fertilizer
4.Chambal Fertilisers and Chemicals Limited is a dividend paying company and my regular followers knew that most of my recommendations are dividend paying because if you read my chinki story from this link:-
How Chinki Earn INR 4,73,90,45,652 from Stock Market
Then you understand that I do not use stop loss so if I hold any stock for a long time then I get dividends, see earlier history of Chambal Fertilizers Dividends here:-
Dividend Declared (  )
EX DateAmount ()
01 Sep 20161.9000
28 Aug 20151.9000
28 Aug 20141.9000
16 Aug 20131.9000
16 Aug 20121.9000
22 Aug 20111.9000
30 Jul 20101.9000
31 Jul 20091.8000
30 Jul 20081.8000
16 Jul 20071.8000
17 Jul 20011.4000
5. The base price of Chambal Fertilisers and Chemicals Limited is 57.01 and Chambal Fertilisers and Chemicals Limited cross his base price from down price to upper price ( read my book for more details). 
So at CMP 62.65 CFCL traded 9% above from his base price, Now I think the valuation of Chambal Fertilisers and Chemicals Limited is still cheap at this level.
Click here to download last three-year closing price data with the graph.
6. No any bonus issue right issue and bulk deals are recorded in last two years. (at BSE )
7. Chambal Fertilisers and Chemicals Limited net sale per share of FY 15-16 is 229.12.
8. Net sale per share 229.12 is  near four-times high from CMP, so stock has a good chance to become multi-bagger
9. Book value of Chambal Fertilisers and Chemicals Limited is 56.57 So CMP is near book value, and stock is not bad for 20% quick return.
8. Finally, I think Chambal is a good trading stock for 20%+  gain from here.
 Due to his subsidiaries and business diversified model stock have good chance to demerge in future.
So Chambal Fertilizer is a good company, but I am not going to buy it due to it pesticide business.
Why I do not buy this stock
For answer of this question remember point 8 of my 2014 recommendation of super crop safe (which I recommended at 14.55 and now traded at 121.60, If you do not remember it then read it again here: -Buy Super Crop Safe@ 14.55

So as I told earlier that I do not buy any stocks which have the business of Alcohol, Pesticides, Cigarettes, Meat and Poultry and this company is engaged in pesticides business.

9. 200 DMA of Chambal Fertilisers and Chemicals Limited is 61.68 So at CMP 62.65  Chambal fertilizers  recently cross his 200 DMA, and If we see June 2016 Result then we find that company turns around from loss to profit which is a good sign for upward movement.
10. I give this recommendation for 20% plus returns, but long term fundamental target price of the stock is 102.80 So you may hold it till 102-103 price.
11. My recent updates: -  Fedders Lloyd Ltd.
12. Disclaimer: - This is not an advisory service to buy or sell. The contents of “this research report” are only for educational purposes. No liability is accepted for any content in “this research report”. The author is neither a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time.The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions. Please read full disclaimer at the bottom of my blog.
13.Discloser: - I Mahesh Chander Kaushik author of this research report is an existing research analyst and passed NISM certification for research analysts. I am also registered under SEBI(RESEARCH ANALYSTS) REGULATIONS, 2014 ( SEBI Registration Number INH 100000908 ) hereby disclose about my financial interest in the subject company and the nature of such financial interest:- 1 Me and my associates or relatives have not hold any share of Chambal Fertilisers and Chemicals Limited, so my personal interest is not included in this stock. 2. Me and my associates or relatives have not any actual/beneficial ownership of one percent or more securities of the subject company ( Chambal Fertilisers and Chemicals Limited). 3. Me and my associates or relatives have not any other material conflict of interest at the time of publication of the research report. 4. Me and my associates or relatives have not received any type of compensation from the subject company(Chambal Fertilisers and Chemicals Limited) in the past twelve months. 5. I am not served as an officer, director or employee of the subject company ( Chambal Fertilisers and Chemicals Limited). 6. I have been not engaged in market making activity for the subject company (Chambal Fertilisers and Chemicals Limited).

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