FFC OUTLOOK

We believe 2H11 would also be a good period for FFC because urea prices one again increased to Rs1,340/ bag and will definitely have positive impact on 3Q11 earnings. Any hike in urea price by Sui network players would favor FFC but additional curtailment on Mari network or hike in feed gas price for Mari network could hamper earnings growth. At current levels the stock is trading at CY11 P/E of 6.83x and offers a dividend yield of 14.26%. We recommend Hold stance for the scrip, as we believe such high urea margins would not sustain in CY12 and onwards