GNFC bucks trend, hits life-time high on gaining 3%; up 33% in one month

The stock hit a new high of Rs 604.40, and has rallied 80 per cent in the past six months, as compared to a 6.6 per cent decline on the Sensex.

Shares of Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) hit a new high of Rs 604.40, up 3 per cent on the BSE in Friday’s intra-day trade bucking the trend in an otherwise weak market. The S&P BSE Sensex was down 1.4 per cent at 54,320 at 09:58 am.

In the past one month, the stock of the fertilizer and chemical company has zoomed 33 per cent after the company reported a robust set of numbers for the quarter ended December 2021 (Q3FY22). In comparison, the benchmark index was down 7.4 per cent during the same period. In the past six months, the stock has rallied 80 per cent, as against a 6.6 per cent decline in the Sensex.

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.

For the first nine months (April-December) of FY22, GNFC posted nearly four-fold jump in its consolidated net profit at Rs 1,067 crore, as against Rs 386 crore in 9MFY21. The company had posted profit of Rs 689 crore in entire FY21.

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.

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.