GNFC Share Price Technical Analysis
GNFC share price looking strong in its technical chart with strong trading volume over the last few trading days. It seems the counter is ready to move up. Limited gas supply in Europe due to western sanctions on Russia, increasing price of Toluene diisocyanate (TDI) will further boost the momentum of this share price. GNFC is the sole producer of TDI. Increasing global price of TDI will definitely boost this counter.
On the daily chart GNFC share price nse completed its correction and formed a cup and handle pattern at bottom at the 680 level. The stock has reached the bottom at 618 level and is moving up. On the daily chart, the GNFC share price nse has formed a strong base at 618 and the small resistance at 695 levels. Once the GNFC share price closes above its previous swing high of 700, GNFC Share price target will be at 800 level. Eventually, GNFC Share price target 2023 will be 900 level.
On the weekly chart, GNFC share price nse is trading with strong volume for the last two weeks. Once it closes above its previous swing high of 6905 level, it will sharply go up. The stock price closed above all the short and long-term moving averages (20 DMA and 200 DMA) in the daily chart. This share looks strong for both short- and long-term investments at this level. one can buy at this level or on dip for a good return.
GNFC Share Price NSE Momentum Indicators
Momentum indicators ADX and MACD are looking bullish on the daily chart. One may buy at this level or at dips for a 10 to 20% gain in the short term. GNFC share price is trading at 6.7 Price to Earnings (PE) and available at 1.44 price-to-book (PB) value while sector PE is 13.7 PE and 2.7 PB. GNFC is a debt free company. The debt-to-equity ratio of the company is 0 times in FY22. The counter seems cheap in comparison to its sector PE with a low debt-to-equity ratio. It is a good stock to accumulate in correction. That reflects strong demand for this stock in the market.
Restriction on Russia due to Ukraine and Russia war acts as a tailwind for this counter. GNFC is in the fertilizer industry that requires natural gas as a raw material. The limited supply of natural gas to Europe and particularly to Germany pushed fertilizer companies to reduce their production. This helps GNFC to capture a greater market share globally and that will help the share price to go up very quickly.
GNFC Share Price Fundamental Analysis
Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) is a joint venture between the Government of Gujarat and the Gujarat State Fertilizers & Chemicals Ltd. (GSFC). The company was strategically located in Bharuch, Gujarat in 1976. The location of the company helped GNFC to draw on the resources of the natural wealth of the land as well as the industrially rich reserves of the area.
GNFC is a producer of bulk chemicals and fertilizers. Most products that the company manufactures import substitutes and contribute to saving valuable foreign exchange. In a few products like Acetic Acid, TDI it is the only producer in the country whereas, in respect of product like Aniline, Formic Acid, it is among a very few producers in the country. Apart from the above, the company is also venturing into other areas such as Energy Sector, Electronics/ Telecommunications, and Information Technology forming ambitious and challenging additions to its corporate portfolio.
GNFC is set to become the largest producer of concentrated nitric acid (CNA) by the end of the year 2022. Currently, the company produces 1,15,0000 metric tonne (MT) CNA annually. GNFC has three plants of CNA at its Bharuch complex. Now the company initiated the process of installing the fourth plant with a 50,000-MT annual capacity and planning to commission it by end of this year.
With this, GNFC’s production will go up to 1,65,000 MT by the end of the year 2022. This additional CNA capacity will help GNFC to cross Rs 10,000 crore turnover by the end of FY23. As of March-end 2022, the company’s turnover was nearly Rs 8,800 crore. The company is the sole producer of acetic acid and TDI in India. Prices for both the products are going up consistently. GNFC Share price target 2023 will be 900 level.
GNFC Share Price Financial Analysis
As per the latest quarterly report, GNFC limited delivered a strong annual revenue in FY22. The company operates in three segments – Fertilizers, Chemicals, and others. Approximately 70% of the total annual revenue in FY22 comes from the Chemicals segment. The total revenue has increased by 65% from INR 5,128.69 Crs in FY21 to INR 8,642.29 Crs in FY22.
The EBITDA of the company has gone up by 138% to INR 2384 Crores in FY22. Profit after tax has gone up by 147% to reach INR 1704 Crores during the same time. The YoY EPS also has gone up by 147% to reach INR109 in FY22. This reflects the strong financial performance of the company. The government of India’s support in releasing timely subsidies and supporting the mixed fertilizer subsidy will further boost its performance.
GNFC limited is a mid-cap company with a market cap of INR 10256 crores with a face value of INR 10. Return on capital employed is ~33.1 percent while return on equity is ~24.6 percent. Promoters have not changed their holdings from June 2021 to June 2022 and they remained the same at 41.18 percent. DII has decreased their holdings in the company from 10.3% In June 2021 to 5.35% in June 2022. However, DII shareholding increased from 5.22% in Mar 2022 to 5.35% in June 2022.
FIIs have also increased their holdings from 22.39% in Mar 2022 to 22.64% in June 2022. FIIs have been increasing their holdings in the stock over the last two years from 11.68% in June 2021 to 22.64% in June 2022. This reflects resumed demand for GNFC shares both for short- and long-term investment purposes. One can keep on adding this stock to the long-term portfolio for a good gain. GNFC Share price target 2023 will be 900 level.
Company Promoters and Management
GNFC is run by strong leadership. Shri Pankaj Kumar, IAS is the Chairman of the company. He is the Chief Secretary of Gujarat State. Mr. Pankaj Kumar is a Senior IAS Officer of the 1986 batch. He has done his B. Tech (Civil Engineering) from IIT, Kanpur, and MBA (Public Policy & Management) from ICPE, Ljubljana. Mr. Pankaj Kumar has wide experience in various departments such as Revenue, Home, Health and Family Welfare, Agriculture, and Disaster & Relief Management in various capacities.
Shri Mukesh Puri, IAS is the director of the company. He is an lAS officer with 32 years of experience in public administration. Mr. Mukesh Puri has done Post Graduation in Economics from the Delhi School of Economics and subsequently obtained a Master’s Degree in International Political Economics from the University of Tsukuba, Japan.