Gujarat State Fertilizers & Chemicals Limited (GSFC) is a prominent public sector undertaking incorporated in 1962, promoted by the Government of Gujarat. Operating under the purview of the Ministry of Chemicals and Petro-Chemicals, GSFC is a key Indian state government-owned manufacturer of fertilizers and industrial chemicals. The company's operations are strategically divided into two main segments: Fertilizer Products and Industrial Products.
The Fertilizer Products segment encompasses a wide range of essential agricultural inputs including urea, ammonium sulphate, di-ammonium phosphate (DAP), ammonium phosphate sulphate, and various NPK formulations (12:32:16, 10:26:26), along with traded fertilizer products. The Industrial Products segment is equally diverse, featuring caprolactam, nylon-6, nylon chips, melamine, methanol, and other industrial chemicals. GSFC holds a leading position in the value chain for Caprolactam and Nylon 6 virgin polymer and its compounds, which are critical components in a variety of performance applications, from consumer durables to the automotive industry.
GSFC boasts a market capitalization of ₹8,258 crore as of recent data, with consolidated revenue reaching ₹9,534 crore and a profit of ₹591 crore. For the full fiscal year ended March 2025, the company reported a net profit of ₹591.06 crore, marking a 4.79% increase compared to ₹564.04 crore in the previous fiscal year. Sales for FY25 also saw a healthy rise of 4.14% to ₹9,533.96 crore from ₹9,154.64 crore in the prior year.
The company's quarterly performance in Q4 FY25 demonstrated significant improvement, with net profit surging by 190.08% to ₹71.68 crore in the quarter ended March 2025, up from ₹24.71 crore in the same quarter last year. Although sales saw a slight decline of 2.19% to ₹1,922.19 crore from ₹1,965.25 crore, the substantial profit growth highlights operational efficiencies and strategic cost management. Further illustrating its solid performance, Q3 FY25 saw net profit rise by 13.44% to ₹133.85 crore, accompanied by a robust sales growth of 40.16% to ₹2,814.07 crore.
- Sales Growth (5-Year Average): 4.10% (considered modest)
- Return on Equity (3-Year Average): 6.59% (considered low for the industry)
- P/E Ratio: 14.28 (as of June 2025)
- P/B Ratio: 0.66 (as of June 2025)
- Promoter Holding: 37.8%
- Debt Status: Significantly reduced and almost debt-free, indicating strong financial health.
- Dividend Recommendation: The Board of Directors has recommended a final dividend of ₹5 per equity share (250%) for FY25, subject to shareholder approval.
GSFC has demonstrated operational efficiency, with a notable 15% increase in fertilizer output year-over-year. However, the company has navigated challenges such as high raw material costs and currency depreciation, which have put pressure on margins. The outlook for the fertilizer segment remains positive, buoyed by favorable monsoon forecasts and government subsidies. Strategic sourcing of ammonia and the ramp-up in DAP production are expected to further enhance profitability in this segment.
The industrial products segment has shown stable demand. The successful operationalization of new facilities is anticipated to bolster overall financial stability and support growth initiatives. While the fertilizer business remains the primary revenue driver with stable margin contributions, the industrial chemicals segment has maintained its performance despite volatility in raw material prices.
A significant recent development is the commencement of full 75 MW solar power supply from Gujarat Industries Power Company Limited (GIPCL) from June 26, 2025. This is expected to lead to a reduction in overall energy costs for GSFC. The company has also reaffirmed its commitment to sustainable development by setting ambitious targets for achieving net-zero emissions by 2047, underscoring its role as a responsible corporate citizen with strong environmental practices.
GSFC has been actively exploring opportunities to expand its caprolactam production capacity, aiming to capitalize on the increasing demand for nylon-6 in the automotive and textile industries. Management expresses optimism regarding the company's long-term growth prospects, driven by India's expanding economy and ongoing infrastructure development.
GSFC holds a strong and respected position within the Indian fertilizer industry and is recognized as a key player in the broader chemical sector. The company is strategically positioned to benefit from the anticipated growth in the fertilizer sector, fueled by favorable agricultural conditions and increased investments in infrastructure projects.
GSFC's diversified business model, focusing on both traditional fertilizer products and industrial chemicals, provides a balanced revenue stream. This diversification helps mitigate sector-specific risks while effectively positioning the company for sustained long-term growth within India's expanding chemical and agricultural markets.
