Ammonia Prices have been relatively high in the month of September hence I believe ammonia plant will contribute to EBIDTA margins. The prices may get lower in coming quarters as Middle East plants start operating but I believe should be in ranges comfortable for DFPCL.
As quoted before by management TAN sales won’t be high this quarter due to cyclical nature hence the value of ammonia profitability might not be that high. But Coal India has produced record coal even in this quarter. So we never know.
I am particularly excited about the demerger in Q3 as it opens up an opportunity to compete with likes of Solar Industries Limited in explosives category. Solar consumes AN from likes of DFPCL. They have the supply chain advantage there although market entry might take a while. Just from a valuation perspective it should open high PE doors.
Would love the forum’s perspective here.
Latest Sources for Ammonia Prices:
- India Misses Urea Tender Target, Ammonia & Potash Remain Stable | Czapp
- Ammonia - Singapore Exchange (SGX)
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