Stellar Q2FY21: Gujarat State Fertilizer's PAT trebles to Rs171cr on massive reduction in inventory

Moving against the tide, Gujarat State Fertilizer & Chemicals Limited informed the exchanges Tuesday that it has put up a stellar performance in the latest quarterly results.

The company posted a net profit of Rs171cr in the second quarter ended September 30 as compared to Rs56cr in the corresponding quarter in the previous year, a rise of 205%.

The fertilizer sales volume grew by 10 % in H1FY21 as compared to H1FY20, whereas the Profit Before Tax grew from Rs63cr to Rs216cr. There was a substantial improvement in the EPS as it grew from Rs1.40/share to Rs4.29/share as compared to the same quarter last year.

GSFC stopped purchasing finished fertilizers, except Urea (imported by Gol) and MoP (where there is no option but to import). Reduction in raw materials consumption expenditure, despite an increase in sales by 10% in volume in H1 Vs H1 and lower price of natural gas and more efficient management of resources have also played a major part in GSFC’s financial results.

In Industrial products, For the first time, export markets were successfully explored. Melamine was exported in large quantity to USA and 8 EU countries and Caprolactum in large quantity to China.

Arvind Agarwal, CMD, GSFC said, “The prominent factors which led to positive second-quarter results of GSFC are the massive reduction in average finished goods inventory by 747cr in Q2 Vs Q2. Due to efficient cash management, there was a reduction in bank borrowings by 908cr as compared to the start of this financial year. There was a focussed thrust on exports of Industrial products and the company also implemented initiatives in import substitution under Aatma Nirbhar Bharat.”

Gujarat State Fertilizers & Chemicals trade ended at Rs66.35 per piece up by Rs1.1 or 1.69% from its previous closing of Rs65.25 per piece on the BSE.