Gujarat State Fertilizers & Chemicals Ltd. (GSFC) delivered a strong start to FY 2026-27, posting its highest-ever Q1 sales of Rs. 3,581 Cr. as fertilizer demand and a sharp rebound in industrial products drove growth.
The fertilizer business was the biggest growth engine. Sales jumped 82% year-on-year to Rs. 2,947 Cr., from Rs. 1,619 Cr. a year earlier. Volumes rose 17% to 5.26 LMT, compared with 4.51 LMT in Q1 FY26.
The surge was driven by higher manufactured and traded DAP volumes, aided by the Government’s DAP Special Package aimed at compensating for international price variations.
However, soaring raw material costs put pressure on margins. Sulphur prices surged 231%, ammonia rose 144%, natural gas increased 38%, and P₂O₅ climbed 30% year-on-year during the quarter.
As a result, the fertilizer segment’s EBIT margin fell to 4.09%, from 8.49% in Q1 FY26.
The Industrial Products segment also posted a strong quarter, with sales rising 15% to Rs. 635 Cr. from Rs. 553 Cr.
EBIT, however, jumped more than fourfold to Rs. 116 Cr., from Rs. 25 Cr. a year earlier.
The improvement was driven mainly by higher Caprolactam sales and a substantial expansion in the Capro-Benzene spread, which widened to $816 per MT from $540 per MT.
The segment’s Q1 sales and EBIT were the second-highest recorded for any first quarter.
GSFC’s Profit After Tax rose 15% year-on-year to Rs. 161 Cr., underscoring the company’s ability to deliver earnings growth despite intense pressure from higher input costs.
Overall Q1 sales rose 65% year-on-year, marking the company’s strongest first-quarter performance on record.
GSFC maintained uninterrupted operations and supply continuity despite heightened geopolitical uncertainty and volatile global supply dynamics.
The company said greater agility in its product mix, timely pricing actions and responsive production planning helped it navigate sharp swings in raw material prices and protect margins across its businesses.
GSFC is continuing to push ahead with its capital expenditure programme as part of its long-term growth strategy.
Key projects include a C-Train modification for APS production at the Sikka unit, with a planned capacity of 1,200 MTPD of APS, as well as a Phosphoric Acid and Sulphuric Acid project at Sikka with capacities of 198 KTPA of phosphoric acid and 594 KTPA of sulphuric acid.
The company expects the revival of rainfall in July, following a subdued start to the monsoon in June, to improve the outlook for the agri-input sector ahead of the Rabi season.
Still, global uncertainty remains a key risk.
The Russia-Ukraine conflict and tensions in the Middle East continue to cloud the outlook for the availability and pricing of raw materials and finished fertilizers, while supply-chain disruptions and higher logistics costs remain concerns.
Elevated prices of key inputs such as Sulphur and Phosphoric Acid are also expected to influence the industry’s product mix, with demand likely to remain tilted towards DAP.
Against this backdrop, GSFC said it will focus on optimizing its product mix and sales strategy, improving operational efficiency and maintaining prudent inventory levels to ensure timely product availability, protect margins and create long-term value for stakeholders.
