By: ICN Bureau
Last updated : November 02, 2026 9:02 pm
GSFC's revenue from operations rose sharply by 48.8% year-on-year to Rs. 4,741 crore
Gujarat State Fertilizers & Chemicals Ltd (GSFC) reported a 38.2% year-on-year decline in consolidated net profit to Rs. 200.24 crore for the second quarter ended September 30, 2026 (Q2 FY27) as compared to Rs. 324.11 crore. The bottom-line contraction occurred despite the company achieving record-high top-line numbers for the quarter.
GSFC's revenue from operations rose sharply by 48.8% year-on-year to Rs. 4,741 crore, up from Rs. 3,187 crore reported in the corresponding quarter of the previous fiscal year.
On a standalone basis, the net profit dropped 43.4% year-on-year to Rs. 183.08 crore. Severe cost escalations in key inputs, notably natural gas and sulphur, heavily compressed the margins of the core fertilizer segment. Total standalone expenses escalated to Rs. 4,650.11 crore from Rs. 2,858.70 crore during the same window last year. In contrast, the industrial chemical segment showed resilient realization trends, which provided a partial cushion to the overall earnings.
In Q2 2026-27, the Fertilizer segment recorded a 55% YoY growth in sales value, increasing by Rs. 1,386 Crores, despite a 6% decline in sales volume from 6.08 LMT to 5.69 LMT. The growth was primarily driven by higher DAP realization, with DAP revenue increasing by Rs. 1,659 crore, supported by the Government's DAP Special Package to compensate for international price variations.
However, sharp increases in key raw material costs, particularly Sulphur (+327%) and Natural Gas (+62%), significantly impacted margins, compressing EBIT of the Fertilizer segment to Rs. 17 crore compared with Rs. 224 crore in Q2 2025-26. Urea subsidy rates remain subject to revision following finalisation of the actual Pool Gas rate by FICC. GAIL, which has been pending since April 2026.
The Industrial Products segment continued its positive performance in Q2 2026-27, with sales increasing by Rs. 185 crore, registering a 30% growth over Q2 2025-26. EBIT improved from Rs. 54 crore to Rs. 66 crore. The improvement was supported by better realizations across major products in line with market trends. Sales of Caprolactam and Nylon increased by Rs. 58 crore and Rs. 60 crores respectively, mainly due to higher realizations, while Anone sales increased by Rs. 36 crores, driven by higher volumes. TGU sales also increased by Rs. 26 crores, partly offset by a Rs. 5 crores decline in Melamine sales. The Capro-Benzene spread improved significantly from US$ 512 per MT to US$ 849 per MT.
Resilient Operations & Agile Response:
Against a backdrop of heightened geopolitical uncertainty and evolving global supply dynamics, the Company sustained uninterrupted operations and ensured supply continuity during the quarter. While sharp movements in key raw material prices put pressure on profitability, agility in product mix, responsive production planning, and timely pricing actions enabled the Company to mitigate the impact and defend core margins across business segments..
Capex led Growth Plan:
GSFC continues to advance its capex plans aligned with its strategic growth roadmap. C - Train Modification for additional 1200 MTPD APS production at Sikka Unit was commissioned on 23rd October,2026.
Outlook:
The country will enter the Rabi season with comfortable fertilizer inventory levels, the highest in the past three years, particularly for Urea and NPK grades, intensifying competitive pressures across the industry. The subdued Southwest Monsoon and lower reservoir levels, especially in Southern India, are likely to constrain fertilizer demand. The prevailing price distortion between DAP and NPK fertilizers continues to influence farmers’ purchase preferences, adversely affecting NPK offtake.
The forthcoming NBS subsidy rates will play a pivotal role in partially mitigating elevated raw material costs and addressing price distortions. Concurrently, any easing of geopolitical tensions in the Middle East and Europe could soften international raw material prices and provide relief to industry margins.
The Caprolactam–Benzene spread is expected to moderate in Q3 26-27 as regional supply normalizes, potentially impacting margins across the Caprolactam–Nylon value chain. Demand for Melamine and Technical Grade Urea is expected to remain steady, while HX Crystal exports may improve amid subdued domestic demand. Other Industrial Products are projected to maintain steady demand, delivering reliable baseline stability to the segment.
In this challenging environment, the company will adopt a proactive and disciplined approach in Q3, prioritising operational efficiency, optimal product mix, sharper inventory management and timely market supplies, while strengthening channel competitiveness and protecting sales realizations and profitability.