National Fertilizers shares extend fall, tank 8% today; should you buy, sell or hold?

Shares of National Fertilizers Ltd fell sharply in Tuesday's trade, extending their fall for the third consecutive session. The stock dived 8 per cent to hit a day low of Rs 75.43 over its previous close of Rs 81.99. At today's low price of Rs 75.43, the scrip traded 15.90 per cent lower from its 52-week high of Rs 89.69, a level recently seen on April 12 this month.

Around 8.90 lakh shares changed hands today on BSE, which was lower than the two-week average volume of 10.81 lakh shares. Turnover on the counter stood at Rs 6.93 crore, commanding a market capitalisation (m-cap) of Rs 3,741.64 crore.

Tuesday's sharp decline came after the company issued a clarification regarding the spurt in volume, in response to an exchange query.

"We wish to inform that there is no information and/or announcement (including pending announcement) which in our opinion may have a bearing on the price/volume behavior of the company's scrip as traded across exchanges and which is required to be informed to stock exchanges in terms of Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, the company has been regularly disseminating unpublished price-sensitive information," National Fertilizers stated.

Brokerage AnandRathi has suggested a target price of Rs 125 over a timeframe of six months. "We advise traders to go long in the stock in the range of Rs 87–83 with a stop loss of Rs 65 for the upside target of Rs 125 in 3–6 months," it mentioned.

"Since the year 2012, National Fertilizers made several attempts to clear the hurdle of Rs 80 on a sustainable basis. The recent breakout happened after 11 years and that is the reason why it cannot be ignored, the brokerage added.

That said, support on the counter could be seen at Rs 76, an analyst said. "National Fertilizers stock price looks bearish on the daily charts with strong support now at Rs 76. A daily close below this support could lead to targets of Rs 68-63.2 in the near term. Resistance will be at Rs 81.3," said AR Ramachandran from Tips2trades.

The stock was last seen trading higher than the 20-day, 50-, 100- and 200-day moving averages but lower than the 5-day moving averages. The counter's 14-day relative strength index (RSI) came at 53.03. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 5.20. It has a price-to-book (P/B) value of 1.66.

National Fertilizers is a government-owned-urea fertiliser producer in India. It is a miniratna company, with the Centre owning a majority stake. It is the second largest producer of the key fertiliser urea in India. NFL has five gas-based ammonia-urea plants, Nangal and Bathinda in Punjab, Panipat in Haryana and two in Vijaipur (Madhya Pradesh). It is engaged in the manufacturing and marketing of urea, neem-coated urea, bio-fertilisers (solid and liquid) and other allied industrial products like ammonia, nitric acid, ammonium nitrate, sodium nitrite and sodium nitrate.

Meanwhile, Indian equity indices extended their fall for the second straight session after a positive start. The domestic indices were pulled down in late deals today due to weakness in financials, consumer and energy stocks.