The Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) Board in its meeting held on 13th August 2024 has cleared an investment proposal for establishing 600 MTPD i.e. 2, 00,000 MTPA of weak nitric acid.

With this investment, GNFC will enhance the capacity of weak nitric acid by around 57%. Apart from this, decks are cleared for investment in Ammonium Nitrate as downstream.

The Board has also approved the appointment of Kearney as Strategic Management Consultant (SMC) for setting strategic direction for the company. With the appointment of the SMC, measures for short, medium and long term will be laid out before the Board for the future growth of the company over next six months.

The impact of capital gain on the company’s long held investment, both quoted and unquoted, is recorded as part of Other Comprehensive Income (OCI). Accordingly, an additional capital gains tax of around Rs. 8 crore is part of OCI.

In Q1 FY25, Fertilizer segment contribution is positive however due to fixed cost under recoveries, the segment is impacted. In the Chemical Segment, better realisations have improved the segment performance.

With annual shutdown getting over at Dahej complex on August 24 coupled with stable Bharuch operations, the company is expected to have better performance in the next few quarters of FY 2024-25.

Pankaj Joshi, Managing Director, GNFC said, "During the Q-1 FY 24-25, industrial chemicals witnessed better margins in general which helped improve the EBITDA. While the EBITDA is favourable, on Q-o-Q basis, the annual turn around at Dahej complex has limited the available volume having consequential impact on PBT. Production at Dahej complex is expected to start on August 24 which will normalise the supply in the domestic market. Of late the domestic share of TDI out of the total production has increased making relatively improved realisation as compared to exports."

GNFC is a joint sector enterprise promoted by the Government of Gujarat and the Gujarat State Fertilizers & Chemicals Ltd. (GSFC). It was set up at Bharuch, Gujarat in 1976. The company started its manufacturing and marketing operations in 1982 with one of the world’s largest single-stream ammonia-urea fertilizer complexes and gradually expanded in chemicals. Today, chemicals form a significant segment of revenue and are a key contributor of segment results.