Budget My Pick: Want massive returns from stocks? Try this share to become rich

Rashtriya Chemicals & Fertilizers (RCF) stocks are currently priced 22% lower than the 52 week-high levels and are also trading below their book value of Rs 55. The Budget 2020 may have some big-ticket announcements for the Agri sector

Budget My Pick: Want massive returns from stocks? Try this share to become rich

From the Budget 2020 point of view, an Agri share has a good potential to do well, going forward. There are always high expectations for the agriculture sector in every budget announcement.

From that standpoint, a fertilizer sector share which is economical and has the potential to give high returns is recommended. One such share that can give you high returns and has low valuations is Rashtriya Chemicals & Fertilizers (RCF).

This Budget 2020 may also have some big announcements for the agriculture sector. The fertilizer sector is due for a Rs 39000 cr government subsidy. This number can go up to Rs 60000 cr by the end of this year according to some experts. So in case, the government allocates a big amount for subsidy payment, then the working capital of RCF and its interest expenses will come down. This may trigger an increase in profits by more than double the amount.

The monsoon has been good this year so the volumes of RCF are expected to be good. There are expectations of much better Q3 results for RCF.

RCF also has a robust land bank of 800 acres in Mumbai which are valued at Rs 10000 cr. The company has a market capitalization of Rs 2900 cr. The company has the right to develop 1.5 lakh square feet of land from the Maharashtra Government.

All these things are working in favour of RCF. The government has also committed to double the incomes of farmers by 2022. Any announcement on Direct Benefit Transfers (DBT) or subsidy is likely to benefit the RCF stocks.

The stocks are currently priced 22% lower than the 52 week-high levels and are also trading below its book value of Rs 55.

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In FY 19 RCF paid over Rs 150 cr as an interest payment while its profits were around Rs 134 cr. If the company gets subsidy in time then the profits could double.

Written By: ZeeBiz WebTeam
Edited By: Prashant Singh
Updated: Mon, Jan 27, 2020
12:04 PM IST
New Delhi, ZeeBiz WebDesk

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