Gujarat State Fertilizers & Chemicals Ltd (GSFC) posted a strong performance in Q2 FY26, achieving solid revenue growth and a sharp improvement in profitability. The company shared detailed insights during its quarterly earnings call held on November 12, 2025.
Revenue Up 21% Year-on-Year
GSFC’s consolidated revenue from operations grew 21%, rising from ₹2,635 crore to ₹3,187 crore.
Profit before tax (PBT) increased 11% to ₹428 crore, while profit after tax (PAT) rose 9% to ₹324 crore.
Quarter-on-quarter, GSFC posted significant gains:
Revenue up 46%
PBT up 132%
PAT up 134%
The management described Q2 as one of the strongest quarters in the company’s history.
Fertilizer Segment: Higher Volumes but Cost Pressure
The fertilizer business recorded a 21% rise in revenue, supported by higher sales volumes — increasing from 5.47 lakh MT to 6.08 lakh MT. GSFC also imported over 1 lakh MT of DAP under the government’s fixed-margin scheme, ensuring adequate supplies for farmers across 15 states.
However, rising raw material prices affected margins:
Phosphoric acid cost increased 20%
Sulphuric acid cost jumped 123%
Sulphur prices surged 150%
While these pressures reduced EBIT for the fertilizer segment to ₹224 crore (from ₹257 crore), lower natural gas and ammonia prices provided partial relief.
Industrial Products Segment Shows Strong Turnaround
GSFC’s Industrial Products (IP) segment delivered a notable recovery:
Revenue grew 13% to ₹618 crore
EBIT improved from a ₹17 crore loss to a ₹54 crore profit
Drivers of this turnaround included:
Full-capacity operation of HX Crystal plants
Better profitability from melamine exports
Stable ammonia trading under long-term contracts
Cost optimization and efficient product mix management supported the segment’s performance, despite global weakness in caprolactam prices.
Strong Liquidity and Healthy Subsidy Flow
GSFC continues to maintain a robust financial position with no long-term debt.
Timely government subsidy disbursement has strengthened liquidity, with payments received for P&K fertilizers up to late September and for urea up to mid-October.
Demand Outlook: Positive for Rabi Season
Management expects fertilizer demand to remain strong due to:
Normal southwest monsoon
Higher MSPs for major Rabi crops
Adequate fertilizer availability across India
For Q3, GSFC projects sales between 5.5 to 6 lakh MT, including both manufactured and traded products.
Challenges in Global Chemical Markets
The company highlighted global challenges impacting industrial chemicals:
Caprolactam–benzene spreads remain weak
Oversupply from China and new tariffs are affecting global prices
Domestic demand for HX Crystal remains soft, though exports are improving
Despite this, GSFC expects stable turnover in the Industrial Products segment.
Conclusion
GSFC’s Q2 FY26 performance reflects strong operational execution, higher fertilizer demand, and a successful turnaround in industrial products. With stable market conditions expected for the Rabi season, the company is positioned to maintain momentum in the coming quarter.
