Zuari Agro
Zuari Agro hit a new 52-week low after it reported a set of very dismal numbers for Q1FY14. It reported a loss of Rs 98.34 crore due to sharp decline in sales and the depreciating rupee too added to its woes. Net sales dropped 38% (YoY) at Rs.727 crore. The depreciating value of rupee put an additional burden of Rs 60.86 crore on the company during the quarter. But the biggest issue was that its complex fertiliser plant was operational for only 19 days during the quarter. This was mainly on account of non-availability of water from the Government of Goa and the plant remained shut from 25th March and reopened only on 5th June.
Promoted in 1967 in Goa, by pioneering industrialist Dr KK Birla, Zuari Agro Chemicals is one of the leading fertilizer conglomerates in India.. The company produces high-quality complex fertilizers of various grades along with seeds, pesticides, micro nutrients, and specialty fertilizers. The company is in the midst of addressing the raw material and energy issues. The company is working towards increasing phosphoric acid plant capacities, the main ingredient in phosphate fertilizers. Once this is secured, it is expected to improve margins though this is not expected to happen in a hurry. The company has already taken steps to hike capcities but this will come into effect only in 2015. This fiscal, we will see the company switch from costlier naptha to natural gas for urea production. Thus the company which is in the midst of a transformation, will take a while to show more vigor.