GSFC Q1FY27 net profit up 15% to ₹161 crore; revenue surges 65%
Gujarat State Fertilizers & Chemicals Ltd posted a record Q1FY27 with revenue surging 65% to ₹3,581 crore and net profit rising 15% to ₹161 crore. Fertilizer sales hit an all-time high of ₹2,947 crore, though margins compressed due to soaring input costs. Industrial products saw a sharp EBIT rise to ₹116 crore driven by wider Capro-Benzene spreads.
*this image is generated using AI for illustrative purposes only.
Gujarat State Fertilizers & Chemicals Limited ( Gujarat State Fertilizers & Chemicals ) reported a significant improvement in profitability for the first quarter of FY27, with standalone net profit after tax rising 15.1% year-on-year to ₹161.11 crore. The consolidated net profit attributable to owners of the company increased 14.4% to ₹158.53 crore, reflecting strong operational performance across the group.
Revenue from operations surged 64.9% to ₹3,581.40 crore on a standalone basis, compared to ₹2,171.65 crore in Q1FY26. This marks the highest-ever Q1 sales for the company. Consolidated revenue followed a similar trajectory, growing 64.1% to ₹3,583.15 crore. The substantial top-line growth was supported by higher cost of materials consumed, which rose to ₹2,409.23 crore from ₹1,257.61 crore in the prior year period, indicating increased production and sales activity.
Segment Performance
The Fertilizers segment delivered a strong operating performance, with sales increasing by 82% from ₹1,619 crore to ₹2,947 crore, marking the highest-ever Q1 fertilizer sales. Sales volumes grew by 17% from 4.51 lakh metric tonnes (LMT) to 5.26 LMT on a year-on-year basis. This growth was driven by higher manufactured and traded Diammonium Phosphate (DAP) sales volumes, supported by the Government's DAP Special Package to compensate for international price variations.
However, the Fertilizers segment reported an EBIT margin of 4.09%, down from 8.49% in Q1FY26. This compression was due to significant increases in key raw material prices amid global geopolitical developments. Sulphur prices rose by 231%, Ammonia by 144%, Natural Gas by 38%, and P2O5 by 30% on a year-on-year basis.
The Industrial Products segment recorded its second-highest Q1 performance to date. Sales increased by 15% from ₹553 crore to ₹635 crore, while EBIT rose sharply from ₹25 crore to ₹116 crore on a year-on-year basis. The improved performance was supported mainly by higher sales of Caprolactam and a substantial rise in the Capro-Benzene spread from $540 per metric tonne to $816 per metric tonne.
Financial Performance Highlights
The company’s profit before tax stood at ₹207.31 crore for the quarter, up from ₹185.59 crore in Q1FY25. Total comprehensive income for the standalone entity reached ₹783.47 crore, significantly higher than the ₹626.47 crore recorded in the corresponding quarter of the previous year. This increase was largely influenced by other comprehensive income items that will not be reclassified to profit or loss, which totaled ₹726.65 crore against ₹567.74 crore in Q1FY25.
| Metric | Q1FY27 Standalone | Q1FY26 Standalone | Change |
|---|---|---|---|
| Revenue from Operations | ₹3,581.40 crore | ₹2,171.65 crore | +64.9% |
| Net Profit After Tax | ₹161.11 crore | ₹140.03 crore | +15.1% |
| Profit Before Tax | ₹207.31 crore | ₹185.59 crore | +11.7% |
| Total Comprehensive Income | ₹783.47 crore | ₹626.47 crore | +25.1% |
Consolidated figures showed consistent growth, with profit before tax increasing to ₹205.14 crore from ₹184.49 crore. The share of profit from associates contributed ₹3.11 crore to the consolidated bottom line, down slightly from ₹5.02 crore in the previous year.
What the Numbers Show
A key analytical observation is the divergence between revenue growth and net profit expansion. While revenue grew by nearly 65%, net profit expanded by only 15%. This suggests that cost structures, particularly material costs and employee benefits, absorbed a significant portion of the top-line gains. Cost of materials consumed rose 91.6% to ₹2,409.23 crore, outpacing revenue growth, while employee benefits expense increased 10.1% to ₹191.29 crore. Additionally, changes in inventories provided a credit of ₹758.07 crore compared to ₹231.81 crore in the prior year, indicating a strategic build-up of finished goods or work-in-progress that positively impacted current quarter earnings but may reflect future cost carry-forwards.
Corporate Actions and Outlook
During its meeting held on August 12, 2026, the Board of Directors approved the unaudited financial results for the quarter ended June 30, 2026. The Board also reappointed M/s N D Birla & Co., Cost Accountants, Ahmedabad, as Cost Auditors for the financial year 2026-27. The firm will be remunerated ₹4,40,000 per annum plus applicable service tax and out-of-pocket expenses, subject to ratification by members at the ensuing Annual General Meeting.
The company continues to advance its capex plans aligned with its strategic growth roadmap. Ongoing projects include the C-Train Modification for APS Production at the Sikka Unit (1,200 MTPD APS) and the Phosphoric Acid (PA) and Sulphuric Acid (SA) Project at Sikka (198 KTPA PA & 594 KTPA SA), both scheduled for completion in Q2FY27.
Looking ahead, management noted that while the revival of rainfall in July has improved the outlook for the agri-input sector ahead of the Rabi season, evolving global geopolitical developments continue to create uncertainty around raw material availability and pricing. The Caprolactam-Benzene spread is expected to remain stable to soft in the near term amid crude oil volatility, potentially exerting pressure on margins across the Caprolactam-Nylon value chain.
The financial results were reviewed by Statutory Auditors M/s CNK & Associates LLP, Chartered Accountants, Vadodara, who issued an unmodified limited review report. The consolidated results include subsidiaries GSFC Agrotech Ltd, Vadodara Jal Sanchay Private Limited, and Gujarat Port and Logistics Company Limited, along with associates Gujarat Green Revolution Company Limited, Vadodara Enviro Channel Ltd, and Karnalyte Resources Inc.
Historical Stock Returns for Gujarat State Fertilizers & Chemicals
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.40% | +0.01% | -0.62% | -11.26% | -21.62% | +43.73% |
How will the completion of the Sikka Unit's Phosphoric Acid and Sulphuric Acid projects in Q2FY27 impact GSFC's raw material self-sufficiency and margin resilience against volatile global input prices?
Given the significant compression in Fertilizers EBIT margins due to soaring sulphur and ammonia costs, what hedging strategies or pricing mechanisms is GSFC employing to protect profitability in the upcoming Rabi season?
To what extent will the expected softening of the Caprolactam-Benzene spread, driven by crude oil volatility, affect the Industrial Products segment's contribution to consolidated earnings in subsequent quarters?
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