The Cabinet Committee on Economic Affairs (CCEA) on Friday okayed Rs 350/tonne increase in the fixed cost for urea plants in accordance to the Group of Minister's recommendations .
Fixed cost include salary and wage expenses, contract labour, repair and maintenance, and selling costs.
Experts say, the fixed cost increase, which has been a long-pending demand of the industry, will not be sufficient to cover the incremental jump in actual costs. As per the proposal, the fixed cost of urea produced by plants which are 30 years old or more by Rs 150 per tonne and for all other plants by Rs 350 a tonne. The minimum fixed cost would be Rs 2,300 per tonne.
The move is expected to lead to an increase in subsidy by about Rs 900 crore which will have a positive impact on urea players. The CCEA is would also consider a proposal to modify New Investment policy for urea. Rashtriya Chem stock price On February 28, 2014, at 15:15 hrs Rashtriya Chemicals and Fertilisers was quoting at Rs 32.40, up Rs 0.30, or 0.93 percent.
The 52-week high of the share was Rs 50.80 and the 52-week low was Rs 26.00. The company's trailing 12-month (TTM) EPS was at Rs 3.90 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 8.31. The latest book value of the company is Rs 42.69 per share. At current value, the price-to-book value of the company is 0.76.
Source: Business News India
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