Gujarat Narmada Valley Fertilizers and Chemicals (GNFC) Q2 25/26 earnings summary

Executive summary

• Board approved a major brownfield expansion of Ammonium Nitrate Melt (163,000 tons), with total ongoing CapEx pipeline above INR 2,800 crore, including nitric acid, power/steam, and ammonia loop projects.

• Additional investments under consideration include Bisphenol A and polyol projects, with a combined potential CapEx of INR 7,000-8,000 crore, pending feasibility and market surveys.

• Q2 FY25-26 performance improved year-over-year due to higher sales volumes and lower input costs, despite non-comparability with Q1 due to annual shutdowns.

• Government revised fertilizer subsidy rates upward and extended anti-dumping duties on TDI and other imports, supporting margins and competitiveness.

Financial highlights

• Q2 FY25-26 standalone operating revenue was ₹1,968 crore, up from ₹1,917 crore in Q2 FY24-25; H1 FY25-26 revenue was ₹3,569 crore.

• Q2 FY25-26 PAT was ₹177 crore, up from ₹102 crore in Q2 FY24-25; consolidated Q2 PAT was ₹179 crore.

• Cash and bank balances declined from INR 2,300 crore to INR 800-836 crore due to dividend payout, CapEx, and working capital increases.

• Dividend of INR 18 per share distributed, with CapEx spend of INR 375 crore during the quarter.

Outlook and guidance

• Cost-saving initiatives with McKinsey and other consultants expected to yield annualized savings of several hundred crore, with benefits visible in the P&L from the second half of next year.

• Ongoing evaluation of new projects, with a total identified investment chest of INR 15,000 crore, prioritizing based on financial and technological feasibility.

• Revised nutrient-based subsidy rates and extension of anti-dumping duty on TDI expected to support future margins.

• Operational cost improvements anticipated with the commissioning of the new power plant in FY25-26.