Gujarat State Fertilizers Annual Revenue Hits Record ₹10,827 Cr; Q4 Profit Collapses 41% on Surging Input Cost

Synopsis:- A record full-year revenue of Rs.10,827 crore and a 24 percent surge in operating EBITDA made FY26 look like a breakout year for Gujarat State Fertilizers & Chemicals until the fourth quarter laid bare the cost problem: highest-ever quarterly sales of Rs.2,622 crore, yet PAT of just Rs.34 crore, down 41 percent from the same quarter a year ago, as surging Sulphur and Sulphuric Acid prices offset every volume gain.

A Gujarat-based fertilizer and chemicals manufacturer reported its financial results for the quarter and full year ended March 31, 2026 on May 22, underscoring a stark divergence between volume momentum and bottom-line delivery. The annual numbers point to genuine improvement across key metrics; the fourth quarter tells a much harder story.

With a market capitalization of Rs. 6,745.83 crore, the shares of Gujarat State Fertilizers & Chemicals Limited closed at Rs. 169.08 per share, down 3.22 percent from its previous closing price of Rs. 174.7 apiece. It is trading at a P/E of 10.22.

On a full-year basis, GSFC delivered its strongest operational performance in several years. Operating revenue grew 15 percent to Rs. 10,827 crore from Rs. 9,429 crore in FY25, while operating EBITDA surged 24 percent to Rs. 781 crore. Profit before tax rose 13 percent to Rs. 838 crore and net profit closed at Rs. 652 crore, up 14 percent. EPS for the year stood at Rs. 16.35 against Rs. 14.38 in FY25.

The Fertilizer segment drove the top-line expansion. Sales grew by Rs.1,196 crore  approximately 17 percent  as volumes rose 12 percent from 19.88 lakh metric tonnes in FY25 to 22.31 LMT in FY26. Fertilizer production reached 17.59 LMT, the highest in five years. However, the volume gains were partly eaten into by higher input costs: Sulphur and Sulphuric Acid prices rose sharply through the year on account of global geopolitical disruptions, compressing margins even as revenue expanded.

The Industrial Products segment produced its best annual profit performance in four years, with EBIT jumping from Rs. 56 crore to Rs. 200 crore. Higher sales of Technical Grade Urea, HX Crystal, and traded Ammonia, along with increased Melamine exports, drove the improvement. The Caprolactam-Benzene spread, however, narrowed to an average of $535 per metric tonne from $578 per MT in FY25  a compression that limited the segment’s upside and is likely to remain a watch point heading into FY27.

The fourth quarter exposes the raw material problem most clearly. GSFC reported its highest-ever quarterly operating revenue at Rs. 2,622 crore in Q4 FY26, up 37.5 percent from Rs. 1,907 crore in Q4 FY25. Within that, Fertilizer segment Q4 sales hit Rs.1,985 crore, a new quarterly peak  with sales value up 43 percent and volumes up 49 percent year-on-year.

Yet operating EBITDA for Q4 was just Rs. 70 crore, virtually unchanged from Rs. 73 crore in Q4 FY25, implying an EBITDA margin of around 2.7 percent on Rs. 2,622 crore of revenue. PBT fell 38 percent to Rs. 48 crore and PAT collapsed 41 percent to Rs. 34 crore. The sequential decline from Q3 (PAT Rs. 157 crore) was equally severe. The arithmetic is blunt: every incremental rupee of fertilizer volume in Q4 was almost entirely offset by input cost escalation.

Capex Pipeline

During FY26, GSFC capitalized projects aggregating Rs. 675 crore, including a Urea revamping project (Rs. 364 crore), a 600 MTPD Sulphuric Acid plant (Rs.233 crore), and a 15 MW solar facility at Charanka (Rs.77 crore). Two large projects remain in execution. A C-Train modification for additional APS production at the Sikka unit (1,200 MTPD capacity) is on track for Q1 FY27. A larger Phosphoric Acid and Sulphuric Acid project at Sikka  198 KTPA PA and 594 KTPA SA  is targeted for Q1-Q2 FY27. The PA/SA project is directly relevant to the raw material cost issue: backward integration into Sulphuric Acid domestically would reduce dependence on global spot prices, the same prices that compressed Q4 margins.

Outlook

Management flagged continued raw material volatility in Q1 FY27, particularly given Middle East geopolitical developments. NBS rates for H1 FY27 were revised upward by 10 percent for Nitrogen, Phosphorus, and Sulphur nutrient support, a mild positive for Fertilizer segment realizations. In Industrial Products, Caprolactam-Benzene spreads are expected to improve modestly, though elevated Q4 prices are seen as unlikely to sustain, and domestic demand for HX Crystal remains soft due to agrochemical sector disruptions.

Business Overview

Gujarat State Fertilizers & Chemicals Limited, incorporated in 1962 and promoted by the Government of Gujarat, is listed on BSE and NSE. The company manufactures fertilizers including Urea, AS, APS, and DAP, alongside industrial products including Caprolactam, Melamine, and Nylon-6.

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