Management itself admitted that high margins in previous year were an aberration. Its a pure commodity play and accordinlgy valuations will also adjust accordinlgy.
EPS will be in the range of Rs 5 per quarter (i.e annualised EPS of Rs 20 ) for next 6 to 8 quarters. Now it is upto individuals what PE they can give for a commodity player.
Even if we give a PE of 15 to 20, there is a long head room for correction in valuation.
Further there is an over hang of 2 major CAPEX undertaken by the Company of around Rs 4000 to Es 4500 Cr (TAN & Nitric Acid)
Fertiliser business is making losses, overall margins are squeezing, Ammonia Capex of Rs 4500 Cr is making losses and Gas for Ammonia plant has been contracted at a higher price.
Disclosure: Exited position and now tracking for knowledge purpose.
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