GNFC soars 15%, hits 52-week high on robust Q3 earnings

Shares of Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) hit a 52-week high at Rs 523.25, on rallying 15 per cent on the National Stock Exchange (NSE) in Monday’s intra-day trade in an otherwise subdued market after the company reported best ever quarterly performance in the December quarter (Q3FY22).

The stock of fertilizer and chemical company surpassed its previous 52-week high of Rs 518.20 touched on October 6, 2021. At 09:58 am; the stock was up 12 per cent at Rs 511.30, as compared to 0.63 per cent decline in the Nifty 50 index.

In Q3FY22, GNFC’s consolidated net profit more-than-doubled to Rs 540.78 crore from Rs 242.59 crore in the corresponding quarter of previous fiscal. Consolidated revenue from operations grew 58 per cent year-on-year at Rs 2,380 crore. Earnings before interest tax and depreciation and amortization (EBITDA) margins expanded 400 bps at 28 per cent.

GNFC said there has been improved overall production and sales volume performance except for the product mix optimisation (Make Vs. Buy Decisions as well as Upstream Vs. Downstream product choices depending upon the market conditions) due to which the margins are actually enhanced.

However, standing firm against elevated input costs, the margins remained protected mainly due to support of higher realisations on output products front mainly led by chemicals as well as serving profitable product mix, the company said.

In case of fertilizers, the support of government for granting special subsidy to compensate the fertilizer producers mainly of DAP/NP/NPKs came as breather and acted as shield towards minimising the adverse impact on financials, it said.

On outlook, GNFC said that the company is in a position to leverage boom in specific products and optimize, both, realization and profits, with flexible and multiple product basket. The company is confident of stable performance balancing its product mix to serve markets.