Q4 25/26

May 25, 2026

Summary

FY26 sales, EBITDA and fertilizer volumes grew, while Q4 fertilizer sales set a record. Input volatility remains elevated; subsidy support, inventory and stronger IP profitability underpin near-term operations.

Ladies and gentlemen, good day, and welcome to Gujarat State Fertilizers & Chemicals Limited, GSFC, Q4 FY26 earnings conference call hosted by Anurag Services LLP Limited. From the management, we have Mr. S. K. Bajpai, Senior VP, Finance and Legal and CFO, and other senior members from the management. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. S. K. Bajpai, Senior VP, Finance and Legal, and CFO, GSFC Limited. Thank you, and over to you, sir. Yeah. Good afternoon, everyone, and thank you for joining us today. On behalf of Gujarat State Fertilizers & Chemicals Limited, I welcome you to discuss our performance in quarter four and financial year 2025-2026. I hope you had a chance to review the financial results, media release and investor presentation available on the stock exchanges and also on our company's website. If we see standalone financial results, the financial year 2025-2026, the sales were recorded at INR 10,827 crores, which is 15% higher than the last comparative periods. PBT and PAT is also increased by 13% and 14% to INR 838 crores and INR 652 crores. If we see consolidated financial performance, the sales increased by 15% to INR 10,945 crores. PBT and PAT is increased by 14% to INR 861 crores and INR 673 crores respectively. Quarter four result, if we discuss, we achieved the highest-ever quarter four sales of INR 2,622 crores. We also recorded highest-ever quarter four fertilizer sales of INR 1,985 crore. Industrial product segment reported highest quarter four EBIT in the last 10 quarters, maintained stable operations despite sharp volatility in global raw material prices arising from geopolitical disruptions. In case of financial year 2025-2026, sales increased by 15% YOY from INR 9,429 crore to INR 10,827 crores. Operating EBITDA grew by 24% YOY to INR 781 crore. PBT increased by 13% YOY to INR 838 crores and PAT by 14% to INR 652 crores. Fertilizer sales volume increased by 12% from 19.88 lakh metric ton to 22.31 lakh metric ton. Achieved highest fertilizer production in last five years at 17.5 lakh metric ton. IP segment delivered highest annual profitability of INR 200 crore in the last four years. We also capitalized major growth projects aggregating over INR 670 crores, strengthening operational efficiency and future growth readiness. The fertilizer segment delivered a strong operational and market performance during both quarter four and financial year 2025-2026, supported by robust demand conditions and higher subsidy support. During the year, segment sales increased by INR 1,196 crores, while volume grew by 12%, led by AS, APS and DAP. Quarter four performance was particularly strong, with the company achieving its highest-ever quarterly fertilizer sales. Despite significant escalation in prices of key raw materials such as natural gas, ammonia, sulfur, and sulfuric acid due to geopolitical developments, the company maintained stable operations, optimized product availability, and achieved highest fertilizer production in the last 5 years. The IP segment demonstrated a strong turnaround and profitability improvement during Q4 FY26 and financial year FY26. The segment achieved its highest annual profitability in the last 4 years and highest Q4 EBIT in the last 10 quarters. Revenue growth and margin expansions were primarily supported by higher sales of HX Crystal and traded ammonia, along with improved export opportunities in melamine, aligned with the Government of India trade facilitation initiatives. While realizations in caprolactam and nylon 6 products remained under pressure due to lower global spreads, the segment benefited from improved product mix, operational efficiencies and better market positioning across key products. We continue to maintain a strong balance sheet with no long-term debt, healthy net worth and adequate liquidity. Government of India's outstanding support on release of fertilizer subsidy has kept the working capital levels at optimum levels. As of date, the company has received subsidy dues for urea up to fourth week of April 2026 and P&K fertilizers up to third week of April 2026. This provides the foundation for the company to advance its CapEx plans aligned with the strategic growth roadmap. The company capitalized the projects worth- Ladies and gentlemen. The line for the management has been disconnected. Please wait while we reconnect them to the conference. Ladies and gentlemen, thank you for patiently holding. We have the management line reconnected. Over to you, sir. Okay. The fertilizer segment heads into Q1 FY27, with raw material markets still unsettled. Geopolitical pressures in the Middle East continue to drive input cost variability. On the policy side, Government of India's revision of NBS rates for H1 FY27, with a 10% uplift across nitrogen, phosphorus, and sulfur nutrients signals a deliberate intent to protect Kharif season supply. We will manage our position accordingly, balancing offtake timing, inventory placement, and margins while staying in step with the Department of Fertilizers directives. Progress of the southwest monsoon and possible emergence of the El Niño conditions will remain key factors influencing demand outlook during the quarter. In the IP segment, the demand picture for Q1 FY27 is mixed and product specific. Caprolactam and caprolactam-benzene spreads are expected to recover during the quarter. However, the elevated caprolactam and nylon 6 prices levels seen in Q4 FY26 are unlikely to hold, leaving realizations under some pressure. Melamine and technical-grade urea face a softer demand environment, with downstream industries running at reduced rates against a backdrop of higher input costs. As domestic demand remains constant, agrochemical and related sectors continue to absorb the knock-on effect of the geopolitical situation. Though export volumes are expected to hold across the remaining Industrial Products portfolio, demand is expected to track broadly at current levels through the quarter. I now turn over the call for questions and answers. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, to ask a question, you may press star and one. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchtone telephone. First question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Yeah. Hello. Namaskar. Namaskar. The premise of the question for investing community and from my side in particular is only we want to understand as today's current environment, how is our organization shaped up and what should investors expect in terms of the business that they are rearing for a consistent set of numbers going ahead, since a lot of regimes are getting played out in the segment as a whole, especially the fertilizer segment. So if you could just glide through us how the management feels for the current financial year on top of the type of geopolitical circumstances, the supply chain issues, we depending a lot on the import part also. So how are things shaping up and how is GSFC preparing itself to glide through this current financial year? Okay. Thank you, Saket. It is a very obvious question. The current situation is very abnormal. As I mentioned, that the prices of raw materials like ammonia, sulfur, sulfuric acid and the other raw material inputs have increased manifold. It is a difficult situation for the company as well as for the country. But fortunately, we are having the ammonia plant and sulfuric acid plant in our Fertilizer Nagar complex. So we are getting ammonia manufactured from natural gas, and there is not much increase in the natural gas prices. It is controlled by the Government of India, and they are prioritizing fertilizer and other priority sectors for supply of natural gas and other LNG. If there is any price increase in the natural gas, it is absorbed by the Government of India by way of the subsidy. As far as sulfuric acid is concerned, the sulfur prices are presently at $850 in the international market. But we are having sulfuric acid quantity available in our store, which is manufactured as per the old long-term contracts with the suppliers. So fortunately, immediately, there is no problem for the Q1 that we will be having any sort of sulfuric acid. But considering the overall situation of the raw material prices, we can only hope that the situation normalizes very soon, and we will be getting the raw material inputs for the fertilizer production at the competitive rates. Sir, can you give us the color on the number of days of inventory we are carrying? What is there in the pipeline currently in terms of replenishing the inventory that is getting consumed for the RM part? How is the pipeline currently shaping up? Actually, ammonia, there is no problem. We are having 100% production at ammonia 4 and ammonia 3 plants. So natural gas is supplied by the government constantly. Ammonia, we are having the stock of around 16,000 metric ton at our Vadodara complex, and there is no price rise expected in the natural gas price in the near future. For sulfuric acid, we have also the inventory up to the full level of the sulfuric acid tanks. So whatever sulfur we are having as per the long-term contract from the certain lines, Nayara, BPCL, and IOCL, we are getting the sulfur. However, it is also to say that we are not getting 100% supply, and it is a very high rate. We are also trying to import sulfur from the international market at a competitive rate so that we can continue our sulfuric acid production for meeting the requirement of ammonium sulfate and ammonium phosphate sulfate in the Fertilizer Nagar Complex. Sir, with respect to the trading for ammonia, are we in the process currently with the type of set up? Are we continuing with that trading aspect also? Yeah. We are importing actually ammonia at our Sikka jetty. We are having our own jetty and a storage facility at Sikka unit, so we are importing ammonia. Whatever ammonia quantity is required by the industries down the line, we are importing that particular portion in the whole segment for the trading purpose. We trade accordingly the ammonia from the Jamnagar plant. Right, sir. Sir, correct me here, sir. We were also looking for some retrofitting or some changes in specification for our fertilizer plant so that we could have alternatively changed the mix of fertilizer. Correct me there. Where are we, sir, in terms of, I think there were two varieties of four fertilizers, which you were able to produce from the same unit by some minor changes. If you could just give us some understanding and also for the current quarter, ensuing quarter, what is the outlook for both these segments? Actually, there is one train of DAP at Sikka unit, which is having the production capacity of 1,300 or 1,400 metric ton per day. We are trying to convert it for the fungible production facilities for other grade of NPKS like ammonium phosphate sulfate. The work is going on nicely as per the scheduled time, and we are expecting this to be completed somewhere in July or in August this year only. After completing of this technical changeover, we will be able to produce either APS or DAP from the DAP train. Right, sir. To the second part of the question, sir? What was that? Please repeat. Yes, sir. My question was, how is the ensuing quarter proceeding with respect to both the segments, both fertilizer as well as the industrial segment, and are we running at optimum levels? Yes, as far as fertilizer is concerned, we are running at optimal level. There are some hiccups in the sulfur supplies sometimes, and we are maintaining our plant loads of ammonium sulfate to the maximum possible capacity. Whatever the lesser capacity we are producing, we are arranging from the international market. We are getting the shipment of ammonium sulfate very soon. The shipment is under loading, and we will get the manufactured ammonium sulfate in granular form very soon. There will not be any production deficiency in the current quarter. As far as IP product is concerned, industrial product segment is having a very positive tone in Q4, it is set up. If you see the caprolactam-benzene spread, it is running more than USD 800 per metric ton today, which was around USD 670 per metric ton in Q4. It is nicely shaped up, and industrial product segment will continue to perform in a better way in the coming quarter. Okay. My last question, I join the queue, sir. For the fertilizer quarter margins, what should we be pressing in terms of the volume that we are factoring for the current year and also the quarter margins that we should be on a blended basis, what should we model out? Sakit, it is very difficult to pin down the particular fertilizer segment margin because things are changing very fast. Raw material price volatility is very high in the international market. However, I can say that DAP and urea, two of the fertilizer products, there is no margin difference because it is fully protected by the Government of India. Whatever additional cost in the gas or whatever production additional cost we are incurring in the DAP manufacturing, that is reimbursed by the Government of India by way of special package. We are expecting to get the circular issued by the Government of India very soon, and it will be protected. Margin will remain same as in the past. However, in case of NPK grades, there will be slight here and there because we had increased the price of APS and other NPK grades. In that, we may see plus minus 5%-10% here and there in the margins. Whatever margin loss we will be having in the fertilizers will be compensated by the IP segment. I had told that it is shaping up very nicely, the prices of the chemical side. Right. Thank you, sir, and all the best to the team. I join the queue, sir. Thank you, Saket. Thank you. Thank you. Ladies and gentlemen, to ask a question, you may press star and one. Anyone who wishes to ask a question may press star and one on their touchtone telephone. As there are no further questions from the participants, I now hand the conference over to Mr. S. K. Bajpai from GSFC for his closing remarks. Over to you, sir. Yeah. Thank you, participants. I hope that I have given the satisfactory answers, whatever is posed to me for the performance of this quarter, financial year, and the next quarter, coming quarter. I thank you for associating with us in this call. Thank you. Thank you, sir. On behalf of GSFC Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.