GNFC margin trails commodity peers as costs offset better realisations
Management cited lower volumes and higher input and fixed costs; a reported Rs 61 cr positive impact is due in Q2 FY26-27.
Filed 05 Aug 2026, 16:56 IST · after market close · Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC)
Key takeaways
- GNFC’s consolidated operating margin was 17.56%, 1.16 percentage points below the 18.72% median for 54 reported commodity peers.
- Consolidated profit before tax included Rs 103 cr of other income, so earnings were not solely operating-led.
- Management said a positive financial impact of approximately Rs 61 cr is to be accounted for in Q2 FY26-27.
Price around the results
Operating margin falls below the commodity peer median
GNFC reported a consolidated operating margin of 17.56%, against a 18.72% median among 54 commodity peers that have reported the quarter. The gap was 1.16 percentage points, placing GNFC 26th from the bottom in the peer set. Other income of Rs 103 cr was also part of consolidated profit before tax of Rs 418 cr.
Better realisations did not offset lower volumes and higher costs
Management said improved realisations across products helped revenue, but lower volumes in most products partly offset that benefit. It attributed the reduced result mainly to higher input and fixed costs, with the continuing war also creating adverse divergence between feed costs and final product realisations in some cases. The company told analysts that it is pursuing a revision in fixed costs for Neem Coated Urea with the government at industry level.
Projects are aimed at energy savings and added capacity
Management said the coal-based steam and power plant under execution at Dahej is expected to improve TDI II operating margins, while the 50 KTPA ammonia expansion at Bharuch is expected to improve loop reliability and deliver some energy-cost savings. The company also said its 200 KTPA Weak Nitric Acid III and 163 KTPA Ammonium Nitrate II projects are expected to strengthen market share and increase revenue and results. Management said the positive financial impact of approximately Rs 61 cr for Apr-25 to Jun-26 will be accounted for in Q2 FY26-27.
Results were filed after market close
The consolidated results were filed after market close on 05 August 2026. The stock’s post-results reaction was therefore not yet available at the time of reporting.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹2,238 cr |
| Other income | ₹103 cr |
| Expenses | ₹1,845 cr |
| Operating profit | ₹393 cr |
| Operating margin (%) | 17.56% |
| Interest | ₹2 cr |
| Depreciation | ₹76 cr |
| Profit before tax | ₹418 cr |
| Tax | ₹106 cr |
| Net profit | ₹312 cr |
| EPS (₹) | ₹21.22 |
Operating margin of 17.56% compares with a Commodities sector median of 18.72% across 54 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q1 revenue marginally increased mainly because of improved realisation across all products, partly offset by lower volumes.
Guidance & outlook
- The company expects a positive financial impact of approximately ₹61 crores for Apr-25 to Jun-26, to be accounted for in Q2 FY26-27.
- The coal-based steam and power plant is expected to improve TDI II operating margins.
- The ammonia expansion is expected to improve existing loop reliability and provide some energy cost savings.
- The WNA-AN projects are expected to strengthen market share and increase revenue and results.
Expansion
- The company has a coal-based steam and power plant project under execution at Dahej.
- The company has a 50 KTPA ammonia expansion project under execution at Bharuch.
- The company has a 200 KTPA Weak Nitric Acid III project under execution at Bharuch.
- The company has a 163 KTPA Ammonium Nitrate II project under execution at Bharuch.
- The company has a new CFBC steam boiler project under execution at Bharuch with capacity of about 180–200 MT/HR.
New initiatives
- The company is pursuing revision of fixed costs for Neem Coated Urea with the government at industry level.
Problems & risks
- Lower volumes in the majority of products partially offset improved realisations during the quarter.
- Higher input and fixed costs reduced the result during the quarter.
- The continuing war has created adverse divergence between feed costs and final output realisation in some cases.
What to watch
- Whether consolidated operating margin holds above 17.56% while input and fixed costs remain elevated.
- Whether the approximately Rs 61 cr positive financial impact is accounted for in Q2 FY26-27 as management indicated.
- Progress on the Dahej power plant and the 50 KTPA Bharuch ammonia expansion.