RCF - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.3

📊 Core Financials Analysis

Profitability

ROE: 5.09% and ROCE: 7.48% — below average, indicating modest capital efficiency.

EPS: ₹5.17 — low earnings per share, reflecting limited bottom-line strength.

PAT Qtr: ₹54.1 Cr vs ₹69.9 Cr — sequential decline, though YoY profit variation shows a sharp spike (+404%), likely due to a low base effect.

Balance Sheet & Cash Flow

Debt-to-equity: 0.58 — moderate leverage, manageable but worth monitoring.

Dividend Yield: 0.81% — modest, not a major draw for income investors.

Cash flows are stable but not robust, and margin pressure remains a concern.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 30.1 Fairly valued vs industry PE of 30.1

P/B Ratio ~1.78 Reasonable given current ROE

PEG Ratio −1.13 Negative PEG suggests unreliable growth expectations

Intrinsic Value ₹135–₹145 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: Rashtriya Chemicals & Fertilizers Ltd (RCF) is a government-owned fertilizer and chemical manufacturer, serving agricultural and industrial segments.

Strengths

Strategic role in India’s food security and fertilizer supply chain.

Government backing ensures policy alignment and demand stability.

Challenges

Weak profitability and low return metrics.

High valuation not backed by consistent earnings growth.

FII holding declined, suggesting cautious institutional sentiment.

📈 Technical & Sentiment Overview

RSI: 50.1 — neutral zone, no strong momentum.

MACD: 0.41 — mildly bullish, but trend is flat.

DMA 50 & 200: Price hovering near both — trend indecisive.

Volume: Below weekly average — waning investor interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹135–₹145 — closer to intrinsic value and technical support.

Holding Strategy

Suitable for value investors seeking exposure to agri-inputs and public sector stability.

Price targets for FY26 range from ₹162 to ₹208; long-term targets for FY30 range from ₹223 to ₹274 based on projected earnings

1

2

.

Monitor subsidy policies, input cost trends, and capacity utilization.

RCF is a defensive play with strategic relevance, but current valuations and profitability suggest a cautious approach. If you're building a portfolio with exposure to agri-infrastructure and public sector resilience, this one may be worth accumulating gradually. You can explore long-term forecasts on Stocks-Buy’s RCF analysis

1

or review technical projections on Daily Bulls

2

.

1

stocks-buy.com

2

dailybulls.in

Edit in a page