This TSX fertilizer stock rose 711% YoY & saw revenue grow 1260% in Q1!

Highlights

• The fertilizer market has been a hot avenue for investment in 2022.
• A Canadian fertilizer stock discussed here spiked by a whopping 711 per cent in the last 12 months.
• This company also saw its revenue zoom by 1,260 per cent year-over-year (YoY) in Q1 FY2022.

The fertilizer market has been a hot avenue for investment in 2022. The global agriculture industry, which had already been facing production challenges amid severe climatic conditions and input costs, saw supply chain bottlenecks get exacerbated further as the Russia-Ukraine war began earlier this year.

As the geopolitical crisis affected the supply of agricultural commodities, including fertilizers, global demand skyrocketed. Prices of fertilizers like nitrogen, potash, ammonia, nitrates etc. rose to record high earlier this year (around March), which seems to have worked in favor of companies producing fertilizers.

As a result, investors flocked towards robust fertilizer stocks in the hopes of pocketing significant returns. The S&P/ TSX Fertilizer & Agriculture Chemicals (Sub Industry) Index surged by almost 66 per cent in 52 weeks, outperforming the TSX benchmark index’s rise of about four per cent in the same period.

If you are a Canadian investor exploring quality TSX fertilizer stocks, here’s one that galloped by a whopping 711 per cent in the span of a year. This Canadian company also saw its revenue expand by significant 1,260 per cent year-over-year (YoY) in Q1 FY2022.

Wondering which stock we are talking about? Well, here it is…

Verde Agritech (TSX:NPK): TSX fertilizer player that saw sales volume surge 574% YoY in Q1

Verde Agritech PLC is a fully integrated agriculture technology company that mines and processes raw fertilizer from its wholly owned mineral properties and provide its fertilizer product (mainly potash) to the market.

The potash producer posted a revenue of C$ 11.3 million in the first quarter of FY2022 compared to C$ 0.83 million in the same quarter a year earlier. The company also saw its sales volume grow by 574 per cent to 111,667 tonnes in the latest quarter compared to Q1 FY2021.

The Canadian company improved its gross margin to 77 per cent in Q1 2022 against 41 per cent a year ago. The C$ 500-million market cap company said that its EBITDA excluding non-cash events swelled to C$ 3.67 million in the latest quarter, up from an operating loss of C$ 0.87 million in Q1 2021.

Verde Agritech also earned a net profit of C$ 3.03 million in the first quarter of FY2022 against a loss of C$ 1.81 million in the same period a year ago.

During Q1 2022, the potash supplier was said to be on track to begin production at its Plant 2 with an initial capacity of 1.2 million tonnes per year (tpy) in the third quarter of 2022.

The agriculture player plans to double its initial capacity of Plant 2 to 2.4 million tpy in Q4 2022. With this expansion in Plant 2 capacity, the overall capacity is set to reach 3 million tpy, which would make Verde Agritech largest potash producing company in Brazil.

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Verde Agritech stock galloped by 254 per cent in 2022!

Stocks of Verde Agritech have surged by roughly 254 per cent year-to-date (YTD) and swelled by approximately 1,025 per cent from a 52-week low of 0.88 (June 18, 2021). NPK stock has also outperformed the TSX Composite Index as well as the TSX Fertilizer & Agriculture Chemicals (Sub Industry) Index.

As per EODHD/Others, NPK’s Relative Strength Index (RSI) value has breached the oversold mark of 80 for a number of times this year. On May 26, its RSI value was 53.17. While looking at its Moving Average Convergence/ Divergence (MACD) indicator, NPK stock has been on an upward trajectory since the beginning of 2022 and highest in March.

What is on the cards for Verde Agritech in Q2 FY2022?

Verde Agritech has revised its Q2 2022 guidance. The company now expects an increased revenue of C$ 22.9 million in the upcoming quarter (Q2 2022) compared to previous guidance of C$ 21.95 million. The small-cap company also increased its revenue outlook for fiscal 2022 to C$ 109.09 million, up from C$ 72.26 million expected earlier.

Keeping in mind such outlook, latest financials and past stock performance, NPK stock can grow further in the future if market conditions favor.

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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.