Gujarat State Fertilizers & Chemicals Limited (GSFC) has reported a strong financial performance for the second quarter of fiscal year 2026, with significant growth in both revenue and profitability.

Financial Highlights

GSFC posted consolidated revenue of Rs. 3,187.00 crores in Q2 FY26, marking a 21% year-on-year increase. The company's profit after tax (PAT) rose by 9% to Rs. 324.00 crores, driven by higher fertilizer sales volumes and improved performance in the industrial products segment.

Segment Performance

Fertilizer Business

The fertilizer business saw a 21% gain in revenue, with sales volume increasing from 5.47 lakh metric tons to 6.08 lakh metric tons. This growth was primarily driven by significant DAP trading. However, due to sharp rises in the cost of imported raw materials, EBIT moderated to Rs. 224.00 crores from Rs. 257.00 crores in the corresponding quarter last year.

Industrial Products Segment

The Industrial Products segment registered a strong turnaround, with sales up 13% year-on-year to Rs. 618.00 crores. EBIT improved from a loss of Rs. 17.00 crores to a profit of Rs. 54.00 crores. This improvement was led by higher sales of traded products such as ammonia and increased production volume of HX Crystal.

Operational Updates

• The company maintained a healthy performance in Q2, demonstrating resilience against raw material volatility.
• GSFC continues to maintain a strong balance sheet with no long-term debt.
• The Sulfuric Acid V project is slated to be commissioned in the coming quarter, which is expected to provide both incremental capacity and cost efficiency benefits.

Market Outlook

• Healthy demand for agri inputs is expected to sustain in the upcoming quarter, supported by an ever-normal southwest monsoon and higher minimum support prices for key Rabi crops.
• The government has announced NBS subsidy rates for the second half of FY25-26 with a 10% increase in phosphorus and sulphur nutrients.
• The caprolactam benzene spread is expected to remain under pressure in the coming quarter amid oversupply conditions.

GSFC anticipates stable demand and turnover in the Industrial Products segment in the next quarter, while the fertilizer segment is well-positioned to achieve sales in line with availability built up through its domestic manufacturing capacities.

The company's strategic focus on cost optimization, product mix management, and export opportunities in products like melamine has contributed to its improved performance, setting a positive tone for the remainder of the fiscal year.

Gujarat State Fertilizers & Chemicals Limited (GSFC) has announced its financial results for the second quarter, showcasing a robust performance across key metrics.

Financial Highlights

GSFC delivered its highest-ever Q2 performance, with total sales reaching Rs. 3,140.00 crore, marking a significant 20% year-on-year growth. The company's Profit After Tax (PAT) stood at Rs. 320.00 crore, representing a 6% increase compared to the same period last year.

Here's a breakdown of the key financial metrics:

Segment Performance

Fertilizer Segment

The Fertilizer segment was a key driver of growth, registering a 21% increase in revenue. This growth was supported by higher sales volumes, which rose from 5.47 Lakh MT to 6.08 Lakh MT, including substantial Di-Ammonium Phosphate (DAP) trading.

However, the segment's EBIT moderated to Rs. 224.00 crore from Rs. 257.00 crore in the previous year. This moderation was attributed to steep increases in key raw material prices:

• Phosphoric Acid: Up by 20%
• Sulphuric Acid: Up by 123%
• Sulphur: Up by 150%

These price hikes offset the benefit of higher realizations in P&K fertilizers. The company noted that softer prices of Natural Gas and Ammonia provided partial relief, although a 15% decline in Urea realization weighed on margins.

Industrial Products Segment

The Industrial Products segment demonstrated a strong turnaround:

• Sales increased by 13% year-on-year to Rs. 618.00 crore
• EBIT improved from a loss of Rs. 17.00 crore to a profit of Rs. 54.00 crore

This improvement was led by:

• Higher sales of traded products like Ammonia
• Increased production and sale of HX Crystal

These factors helped overcome headwinds in Caprolactam and other major industrial products. The Caprolactam–Benzene spread declined to USD 512.00 per MT from USD 620.00 per MT, but cost optimization measures and product-mix management supported profitability.

Outlook

GSFC anticipates a positive outlook for the upcoming quarter, citing several factors:

• An above-normal southwest monsoon
• Higher Minimum Support Prices for key Rabi crops
• Healthy demand expected for agri-inputs
• Government announcement of NBS subsidy rates for H2 2025-26, with a 10% increase in Phosphorus and Sulphur nutrients
• Comfortable opening fertilizer inventories for the Rabi season

The company expects to achieve sales in line with availability built up through its domestic manufacturing capacities during the third quarter.

For the Industrial Products segment, GSFC anticipates:

• Pressure on the Caprolactam–Benzene spread due to oversupply conditions and a prolonged slowdown in China
• Steady demand for Melamine in both domestic and export markets
• Soft domestic demand for HX Crystal, with potential improvement in export volumes
• Stable demand for other Industrial Products, though pricing pressure may persist due to cheaper Chinese imports

Overall, GSFC projects stable demand and turnover in the Industrial Products segment for Q3 2025-26.

Expansion Plans

GSFC has outlined its ongoing expansion projects:

These expansion plans are expected to enhance GSFC's production capabilities and market position in the coming years.

GSFC's Q2 FY 2025-26 results demonstrate the company's resilience in the face of raw material volatility and its ability to maintain growth momentum across both business segments. The company's strategic initiatives and expansion plans position it well for continued growth in the fertilizer and industrial products markets.