GNFC

I believe GNFC has competitive advantage which is sustainable.

The EPS growth which I analysed is predictable.


http://www.nseindia.com/marketinfo/companyinfo/eod/announcements.jsp?symbol=GNFC

Main activities are to produce and distribute chemicals, fertilizers, IT solutions, and electronic goods.The Fertilizers Co. of Gujarat Narmada Valley has a Urea plant which is the world's single largest stream plant and also an Ammonia plant which too is one of the largest in the world.

The various fertilizers manufactured by the Gujarat Narmada Valley Fertilizers Co. are:
Urea
Single Super Phosphate
Ammonium Sulphate
Muriate of Potash
Di-ammonium Phosphate
Calcium Ammonium Nitrate

The various chemicals manufactured by the Gujarat Narmada Valley Fertilizers Co. are:
Acetic Acid
Methanol
Formic Acid
Ammonium Nitrate
Calcium Carbonate
Methyl Formate

The advantage of fertilizer company is that
"though the price of fertilizer is 1/5th that of the global market, the goverment compensates the fertilizer companies by providing subsidy for the difference in the actual price and the price paid by the farmers. The farmer community is a major votebank that the political parties will hesitate to loose by displeasing them"
This is a advantage to the fertilizer industry as a whole.

The key issue is to find whether this advantage is durable. Another issue will be that when all the players in the industry gains then which are the companies which is going to benfit from it the most.

Source: http://www.scribd.com/doc/5061434/Indian-Fertilizer-Sector

Further the impact of NPS stage III policy according to ICRA is favourable to few companies like GNFC, NFL, GSFC and DCM Sriram Consolidated Ltd. View 9th page of http://www.icra.in/Files/PDF/ArticleFiles/2007-March-StageIIIUreaPolicy.PDF

Futher GNFC and NFL gain because of
1. full reimbursement of Tax inputs.

Notes:

Few years back the a company resolution was proposed to use 30% of the profits for charitable use. To a shareholder this is like another tax on income and an unfriendly attitude in play. The protection of the moat being a state owned company thus becomes a double edged sword for the shareholder. Though this proposal was defeated, the threat exists.

The lack of sustained leadership at the top management can be seen by the change of leaders. This is like a ship changing its captain during its voyage frequently.