GSFC has target of Rs 152: Ashish Chugh

Investment Analyst, Ashish Chugh is of the view that Gujarat State Fertiliser Corporation, GSFC has target of Rs 152.

Chugh told CNBC-TV18, "GSFC is a Gujarat government undertaking making fertilisers as well as industrial chemicals. This company also is into agri-businesses like seeds and biotech products. This company holds shares of Gujarat Narmada Fertilisers Corporation (GNFC), Gujarat Alkalies and Chemicals and Gujarat Industries Power Company (GIPCL) which are valued at close to Rs 500 crore. Market cap of the company is just about Rs 1,100 crore. The company has declared a dividend of 45% for FY09, the stock is currently available cum dividend. The book value of the company as on March 31, 2008 was Rs 250 which should have gone upto about Rs 300 in the latest financial year. Stock currently trades at less than half of the book value.”

He further added, “There are two main key triggers for this stock. One is availability of natural gas. Availability of natural gas will lower the production cost of the company and increase the profit margins. The long-term trigger for this stock is as and when the Gujarat government decides to disinvest stake in this company, this could lead to a substantial re-rating of this stock. Target for the stock is Rs 152 and I hold shares of GSFC."