Natl.Fertilizer (NFL)
CyclicalFairStock Score: 31/100 — RISKY
Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 1/1
Key Financials
| Current Price | ₹71.81 |
| Market Cap | ₹3,522.84 Cr |
| P/E Ratio | 16.66 |
| ROCE | 7.57% |
| ROE | 7.61% |
| Dividend Yield | 2.17% |
| Profit Growth | 12.4% |
| Debt/Equity | 1.4 |
| Sales Growth | -2.5% |
| Promoter Holding | 74.71% |
| 52-Week Range | ₹63.35 — ₹101.4 |
| Sector | Fertilizers & Agrochemicals |
| Book Value | ₹57.93 |
Strengths
- Sales growth of 17.31% and profit growth of 195.13% show strong recent operational momentum.
- Piotroski F-score of 7/9 suggests improving financial health across profitability, leverage, and efficiency.
- P/B of 1.44 and dividend yield of 2.02% provide some valuation cushion for investors.
- Promoter holding of 74.71% aligns management incentives with minority shareholders.
Concerns
- Low ROE of 5.64% and ROCE of 7.57% indicate weak capital productivity and limited competitive moat.
- Debt/Equity of 1.77 is high, amplifying financial risk in a low-margin, cyclical business.
- Latest quarterly net margin is roughly 2% (₹135 crore on ₹6,870 crore sales), leaving very little room for error.
- P/E of 19.48 is not cheap enough for a business with such low returns and earnings volatility.
AI Analysis
At first glance, NFL's numbers tell a story of a company waking up. Sales grew 17.31%, profits jumped 195.13%, and the Piotroski score of 7/9 suggests recent operational improvement. But as Graham taught, one season's growth is not evidence of a wonderful business. With a market cap of ₹3,793 crore and price at ₹77.41, the P/E is 19.48. That is not cheap for a company earning only 5.64% return on equity and 7.57% return on capital employed. The latest quarter earned ₹135 crore on ₹6,870 crore of sales—a net margin under 2%. That is a razor-thin shield against input costs or any business shock. The debt-to-equity ratio of 1.77 is concerning; the growth story is built on leverage. Book value is ₹53.71, so the stock trades at 1.44 times book. Not distressed, but not a wide margin of safety either. Dividend yield of 2.02% provides modest comfort, and promoter holding of 74.71% shows skin in the game. Yet a PEG of 0.18 assumes the 195% profit growth is sustainable, which is unlikely for a business with such low returns and high leverage. I would rather wait for stronger returns on capital, lower debt, and evidence that the company can earn a reasonable margin through a full cycle. Until then, this looks like a cyclically improved commodity business, not the wonderful business I seek.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer