GSFC posts 205% rise in Q2 PAT

Moving against the tide, Gujarat State Fertilizer & Chemicals (GSFC) Ltd has put up a stellar performance in the second quarter results released today, the company said in a media statement.

The company posted a net profit of Rs 171 crore in the second quarter ended September 30 as compared to Rs 56 crore in the corresponding quarter in the previous year, a rise of 205%.

“The prominent factors that led to sound second quarter results of GSFC are the massive reduction in average finished goods inventory by Rs 747 crore. Also, due to efficient cash management, there was a reduction in bank borrowings by Rs 908 crore as compared to the start of this financial year. There was a focused thrust on exports of industrial products and the company also implemented initiatives in import substitution under ‘Aatmanirbhar Bharat’,” said Arvind Agarwal, CMD, GSFC.

The fertilizer sales volume grew by 10% in H1 of FY20-21 as compared to H1 of FY19-20, whereas the profit before tax grew from Rs 63 crore to Rs 216 crore in the period under review. The company saw a recovery in sales as compared to quarter ended June 20 on the back of robust kharif demand in Q2.

There was a substantial improvement in the earnings per share that grew from Rs 1.40/share to Rs 4.29/share as compared to

same quarter last year.

GSFC stopped purchasing finished fertilizers, except urea (imported by GoI) and MoP (where there is no option but to import).

Reduction in raw materials consumption expenditure, despite increase in sales by 10% in volume in H1 2021 vs H1 2020 and

lower price of natural gas and a more efficient management of resources have also played a major part in GSFC’s financial

results, the company said. In industrial products, for the first-time export markets were successfully explored.

Melamine was exported in large quantity to USA and eight EU countries and caprolactum in large quantity to China. 

Taking a lead in Prime Minister Narendra Modi’s clarion call of Aatmanirbhar Bharat initiative, GSFC has initiated plans to invest

Rs 1500-2000 crore for rolling out as many as 21 products where India has a strong dependency on imports, especially from China.

Earlier on August 31, the company restarted its methanol plant at Vadodara. The factory was shut for six years due to nonviability. It is presently operating at more than 90% capacity.

GSFC had recently started production of calcium nitrate and is presently the only producer in the country. It is one of the 21 products under GSFC’s Aatmanirbhar initiative.