/** Title: GSFC FY 2025-26: Record Q4 Sales, Fertilizer Volume Growth, and a Better Industrial Products Mix */

GSFC FY 2025-26: Record Q4 Sales, Fertilizer Volume Growth, and a Better Industrial Products Mix

Gujarat State Fertilizers and Chemicals Limited reported a stronger FY 2025-26 on revenue and profits, while also acknowledging that raw material volatility remained a persistent headwind. Operating revenue rose 15% year-on-year to Rs. 10,827 crore versus Rs. 9,429 crore in FY 2024-25. Operating EBITDA increased 24% to Rs. 781 crore. Profit before tax grew 13% to Rs. 838 crore and profit after tax rose 14% to Rs. 652 crore.

The quarter was notable for scale. The company reported its highest-ever quarterly sales in Q4 FY 2025-26 at Rs. 2,622 crore. Fertilizers contributed a record quarterly sales value of Rs. 1,985 crore, supported by higher volumes and strong demand conditions.

Two segments, two different operating realities

GSFC’s performance continues to be shaped by two distinct businesses: Fertilizers and Industrial Products.

In Fertilizers, the company delivered a robust year on volumes. Fertilizer sales volumes increased 12% from 19.88 lakh metric tonnes in FY 2024-25 to 22.31 lakh metric tonnes in FY 2025-26. The company also reported its highest fertilizer production in the last five financial years at 17.59 lakh metric tonnes. Urea, APS and AS were cited as key contributors to volume growth.

However, the company stated that fertilizer profitability was under pressure due to a sharp increase in key raw material costs, particularly sulphur and sulphuric acid, linked to global geopolitical developments.

Industrial Products had a different narrative. The company stated that the segment delivered its highest yearly profitability in the last four years and its highest Q4 EBIT in the last 10 quarters. Segment sales grew by Rs. 202 crore (9%) during FY 2025-26. EBIT increased from Rs. 56 crore to Rs. 200 crore year-on-year, supported by higher sales of Technical Grade Urea, HX Crystal and traded ammonia, along with higher melamine exports.

At the same time, management acknowledged pressure in realizations for caprolactam and nylon products. The company cited a Capro-Benzene spread average of USD 535 per MT in FY 2025-26 versus USD 578 per MT in FY 2024-25, indicating a less supportive spread environment over the year.

Financial summary

Note: The presentation also referenced consolidated sales of Rs. 10,945 crore for FY 2025-26, with consolidated PBT of Rs. 861 crore and PAT of Rs. 673 crore, as stated by management on the earnings call.

Input costs, spreads, and operational continuity

The company’s materials highlighted that FY 2025-26 and Q4 were impacted by geopolitical volatility and global supply chain disruptions. GSFC stated that it maintained uninterrupted operations and supply continuity through operational planning and product mix optimization. It also referred to proactive pricing interventions and real-time recalibration of production strategy.

The presentation included key input cost movement data across imported P2O5, benzene, natural gas, and ammonia. For the periods shown, imported P2O5 increased from 95 (Mar-25) to 123 (Mar-26) in the units presented, while ammonia increased from 38 to 53. Natural gas was shown moving from 39 (Mar-25) to 42 (Mar-26) in the units presented.

For industrial economics, the Capro-Benzene spread table in the investor presentation showed a spread of $521 per MT in Mar-25 and$593 per MT in Mar-26, with intermediate quarters reflecting fluctuation. Management also stated on the call that the caprolactam-benzene spread was above $800 per metric ton at the time of the call.

Capex and expansion plan: timelines and completed work

GSFC reiterated that its capex-led growth plan remains on track. The company stated that projects aggregating Rs. 675 crore were capitalized during FY 2025-26.

The investor presentation lists the following projects commissioned during FY 2025-26:

• Urea revamping project at Rs. 364 crore
• 600 MTPD SA-V project at Rs. 233 crore
• 15 MW solar power project at Chananka at Rs. 77 crore

On the expansion pipeline, the company listed ongoing projects and indicative timelines:

• C-Train modification for APS production at Sikka Unit (1200 MTPD), indicated for FY 26-27 Q1 in the timeline table
• Phosphoric Acid and Sulphuric Acid project at Sikka (198 KTPA PA and 594 KTPA SA), indicated for FY 26-27 Q2 in the timeline table

Management added operational colour on the earnings call, stating that the DAP train at Sikka (about 1,300–1,400 MTPD) is being converted to allow fungible production of other grades such as APS and that the work is expected to complete in July or August 2026. Post completion, the company expects the train to be able to produce either APS or DAP.

Outlook: policy support, monsoon watch, and product-specific demand

For Q1 FY 26-27, GSFC expects the fertilizer operating environment to remain dynamic, citing continued volatility in global raw material markets due to geopolitical developments in the Middle East. It also referenced the Government of India’s Nutrient-Based Subsidy rates for H1 FY 26-27, noting a 10% increase in nutrient support for nitrogen, phosphorus and sulphur, aimed at ensuring fertilizer availability during the Kharif season.

The company stated it will continue a balanced approach across sales opportunities, stock placements and margin management while remaining aligned with Department of Fertilizers supply objectives. Management also pointed to the progress of the southwest monsoon and possible emergence of El-Nino conditions as key demand variables.

For Industrial Products in Q1 FY 26-27, GSFC expects a mixed demand environment. While caprolactam-benzene spreads are expected to improve, elevated caprolactam and nylon-6 prices seen in Q4 FY 2025-26 are not expected to sustain, which could pressure realizations. Demand for melamine and technical grade urea is expected to remain subdued due to lower operating rates in downstream industries amid higher raw material costs. Domestic demand for HX Crystal is expected to remain weak, although export volumes are expected to remain stable.

Takeaways

GSFC ended FY 2025-26 with a clear set of positives: higher revenue, higher EBITDA, and record quarterly sales, backed by strong fertilizer volume growth and better profitability in Industrial Products. At the same time, the company’s own commentary highlights that input cost volatility remains a key swing factor, especially for the fertilizer segment.

The near-term narrative hinges on how raw material prices evolve, how policy support translates into realized economics, and how industrial spreads and downstream demand settle into a more normal pattern. Alongside this, GSFC’s capex execution and the scheduled flexibility enhancements at Sikka will be important operational levers through FY 26-27.