CHAMBLFERT - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.5

🌾 Fundamental Analysis

Chambal Fertilisers is a fundamentally strong company with attractive profitability and low debt, but its valuation is currently elevated relative to growth. Here's the breakdown

Metric Value Implication

Market Cap ₹21,339 Cr Mid-cap; stable presence in agrochemicals

Stock P/E 12.9 Undervalued vs. industry PE of 26.1

PEG Ratio 6.64 Overvalued relative to growth; caution advised

ROCE / ROE 27.9% / 20.6% Excellent; strong capital efficiency and return on equity

Dividend Yield 1.88% Attractive; adds value for long-term holders

Debt-to-Equity 0.01 Virtually debt-free; excellent financial health

EPS ₹41.2 Strong earnings base

Qtr Profit Var +34.6% Positive momentum; earnings improving

FII/DII Holding Change -3.07% / +1.98% FII exit; DII confidence rising

📉 Technical Analysis

Current Price: ₹533

DMA 50 / DMA 200: ₹564 / ₹550 → Trading below both; bearish trend

RSI: 38.3 → Approaching oversold zone; potential for rebound

MACD: -6.91 → Bearish momentum

Volume: Below average; weak short-term conviction

💰 Valuation & Entry Zone

Despite strong fundamentals, the high PEG ratio suggests the stock is overvalued relative to its growth trajectory. Ideal entry zone

₹480–₹510

This range aligns with technical support and offers a better margin of safety

Avoid fresh entry above ₹550 unless earnings growth accelerates.

📈 Long-Term Investment Outlook

Pros

High ROE and ROCE

Debt-free balance sheet

Attractive dividend yield

Strong EPS and earnings momentum

Cons

PEG > 6 indicates valuation mismatch

FII exit may reflect short-term caution

Technicals still weak

Chambal Fertilisers is a solid long-term candidate if growth sustains and valuation normalizes.

🏁 Exit Strategy / Holding Period

If you already hold this stock

Short-Term: Hold; RSI suggests nearing bottom

Medium-Term: Consider partial exit near ₹600–₹620 if valuation remains stretched

Long-Term: Hold for 2–3 years if ROE stays >20% and PEG drops below 2

Exit fully if price crosses ₹700 without earnings support, or if ROCE drops below 20% for consecutive quarters.

Would you like a comparison with other fertilizer companies like Coromandel International or Deepak Fertilisers to assess sector positioning?

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