RCF claims fast recovery from Covid-19 jolts; stock dips ~2%

The company having manufacturing operations in Maharashtra was affected by lockdown

Jul 16, 2020 02:07 IST India Infoline News Service

RCF, Rashtriya Chemicals & Fertilizers
Rashtriya Chemicals & Fertilizers (RCF) Limited informed the exchanges Thursday that it is in the business of manufacture and sales of fertilizers and Industrial chemicals PAN India. The immediate impact of the Covid-19 pandemic with respect to customer and governmental reactions to the crisis have been varied.

The company was affected by lockdown as well as Covid-19 in many ways but the recovery has been fast underway due to number of immediate steps taken by the company.

RCF is currently trading at Rs46.90, down by Rs0.85 or 1.78% from its previous closing of Rs47.75 on the BSE.

The company's manufacturing operations are in state of Maharashtra- (Trombay & Thal). At Trombay unit, after a temporary suspension of operations, production of major fertilizers like Urea & Suphala have normalized along with bio fertilizers and the sales of the same also has been consistent. The operations of industrial products like Nitric Acid, AN Melt, CNA, ABC also recovered well after a lull in April 20.

At its Thal unit, Urea operations continue to operate at normal levels despite some logistics hurdles in the initial period and has achieved optimum operation during the en tire Covid-19 period.

Owing to lockdown imposed worldwide due to Covid-19, there has been a delay in installation and commissioning of the repaired Gas Generators as originally envisaged at its Thal Unit. The same has been received in July 2020 and is expected to be commissioned in August 2020.

Similarly, at Trombay unit, the commissioning of its Gas Turbine Plant stands revised t:o March 2021 as against originally envisaged during May-June 2020.

As RCF had incurred such expenditure targeting energy reduction, Government of India further considering the disruptions caused due to Covid-19 pandemic, has allowed continuation of existing norms for its Trombay Urea plant with a minor penalty till September 30, 2020.

The company has a very positive liquidity position with sufficient credit lines available. However, owing to rationalization in Government expenditure on account of Covid-19, there has been delays in settlement of subsidy by Government of India. Any further delay would add to stress on working capital and borrowing costs.

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