On Thursday, October 10, during intraday trading, shares of Rashtriya Chemicals and Fertilisers (RCF) surged by more than 8%. This was in response to the company’s sizeable purchase order it had put on Larsen & Toubro Ltd (L&T) for a new fertiliser plant. This breakthrough is the result of RCF’s ongoing efforts to increase its manufacturing capacity and help India’s agriculture industry even more.
“…we hereby inform that the Board of Directors of the Company at its meeting held today i.e. October 9, 2024, has accorded its approval for Placement of Purchase Order on Larsen & Toubro Ltd for setting up of 1200 MTPD (DAP basis) Complex Fertilizer plant on LSTK Basis at RCF, Thal,” the company said a stock exchange filing.
The plant will be built using lump-sum turn-key (LSTK) development, which means L&T will oversee every aspect of the project management process, from design to procurement and construction. The contract has a value of ₹1,000.27 crore (GST excluded), and it will take 27 months to complete.
When the new facility is put into service, it will greatly increase RCF’s capacity to produce fertiliser, which is essential for satisfying the rising demand from Indian farmers. This action supports the company’s objective of guaranteeing a steady supply of fertilisers, strengthening its position in India’s agricultural industry.
Previous Investments in Capacity Expansion
India’s agrarian economy depends heavily on fertiliser, and this project will help satisfy the country’s expanding agricultural needs.
This latest agreement is a continuation of RCF’s previous growth plans, which also includes an agreement for the renovation of its ammonia plant at RCF Thal with the multinational company Topsoe. The July 2024 announcement of the ₹514.6 crore contract centred on modernising the ammonia plant in order to lower particular energy use. Over 36 months, the renovation calls for the purchase of a basic engineering design package (BEDP) as well as the delivery of catalysts and specialised equipment.
Expanding Presence Across Maharashtra
RCF runs two sizable production facilities: one in Thal, Maharashtra, and one in Trombay. These factories produce a wide variety of industrial chemicals as well as nitrogenous, phosphatic, and potassic fertilisers. The strategic initiatives of the company are aligned with its vision of upholding leadership in the fertiliser sector of India and guaranteeing sustainable growth via technological advancements and capacity expansion.
RCF’s new agreement with L&T highlights its commitment to modernising its infrastructure and maximising production efficiency, which will help it achieve its long-term growth goals in both local and foreign markets.
Stock Price Trend
The stock reached its day’s high of ₹185.25, up as much as 8.3%. Following today’s surge, the stock is now more than 24% below its all-time high of ₹245 set in July of this year. In the meantime, it has increased by more than 57% from its October 2023 52-week low of ₹117.65.
Over the past year, the share price has increased by more than 40%, and year-to-date (YTD), it has gained by more than 16%. After two months of declines, the stock has gained 1% so far in October. It decreased by 8% in August and 10% in September. It had been rising for four months in a row before then, rising by 13% in July, 25% in June, 2% in May, and 17.5% in April.
