Agri Input & Chemicals - New Urea Investment Policy to benefit the industry - Emkay

- Media reports suggest that CCEA has approved the New Urea Investment Policy. The New UIP is expected to pave way for fresh investments & boost urea production domestically

- New investment ensures post tax returns of 12-20% as against <12% earlier. It also bears the entire cost of gas which earlier was proposed with ceiling of US$14 / mmbtu

- This is likely to attract investments of Rs 350-400bn over a period of next 3-4 years. However, securing gas sourcing contracts will be next key hurdle for companies

- We remain positive on the sector. Chambal Fertilisers (Accu) and Tata Chemicals (Buy) are key beneficiaries along with RCF (NR) and Zuari (NR)

Source : Equity Bulls

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