Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) gained 2.04% to Rs 408.60 after the company reported a 29.4% rise in consolidated net profit to Rs 308.91 crore in Q4 FY21 as against Rs 238.77 crore in Q4 FY20.
Net sales rose 29.1% to Rs 1733 crore in Q4 FY21 compared with Rs 1342.47 crore in Q4 FY20 aided by better realisation of industrial chemicals.Profit before tax (PBT) soared 229.5% to Rs 449.81 crore in Q4 FY21 from Rs 136.53 crore in Q4 FY20. PBT margin rose to 26% in Q4 FY21 from 10% in Q4 FY20. EBITDA grew 189% to Rs 470 crore in Q4 FY21 from Rs 163 crore in Q4 FY20. EBITDA margin improved to 27% in Q4 FY21 from 12% in Q4 FY20.
The company posted a 38.1% rise in consolidated net profit to Rs 689.21 crore for the year ended March 2021 (FY21) as compared to Rs 498.90 crore in the year ended March 2020 (FY20). Net sales declined 0.7% to Rs 5,128.69 crore in FY21 over FY20.
During the year, improved realisation across the board in chemicals has contributed to improved bottom line.
The board of directors has recommended a dividend of Rs 8 per equity share ofor the year ended 31 March 2021.
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Commenting on the performance, Pankaj Joshi, MD of the company said, "Inspite of impact of COVID-19 on production and sale volume for practically one full month of April 2020 for Bharuch Complex and in case TDI Dahej complex till middle of June 2020, the company has achieved second highest PBT of Rs 948 crore for FY 21 in the history of GNFC."
During the FY21, the fertilizer segment results were reduced from Rs 216 to Rs (24) crores mainly due to Covid 19 forced shut down of plants during FY21 resulting in to production and sales losses as well as one time urea subsidy income of earlier years booked in FY20 (Rs 160 crore on comparable basis). Inspite of lower production and sales volume due to forced shut down of plants, the chemical segment results improved substantially by 425% from Rs 166 crore to Rs 874 crore mainly due to increase in Sales realisations across the board.
Further, the board has cleared the Capex plan of Rs 1,250 crore for its various product lines like Ammonia, Weak Nitric Acid (WNA) and AN Melt. On the liquidity front, due to additional allocation of budget Rs 65,000 crore by GoI, the company has received highest ever subsidy of Rs 1,722 crore during FY21, which has improved the cash position of company substantially. The company is already implementing de-bottlenecking in respect of Formic Acid as well as Toluene Di-Isocyanate (TDI) in addition to brownfield expansion of Concentrated Nitric Acid (CNA).
In his outlook, Joshi said that the company is confident of performing well in the fertilizers business. Rise in demand from end user industries and increasing per capita consumption is likely to support strong demand for chemicals. Companies, indigenous as well as global, seeking to de-risk their supply chains and reduce dependency on China presents a valuable growth opportunity for Indian chemical manufacturers. Moreover, prudent and industry friendly policies like Atmanirbhar Bharat, PLI scheme, 100% FDI, mandatory BIS standards, PCPIR policy etc. by the government can prove to be a game changer for this industry.
GNFC is engaged in operating businesses in the industrial chemicals, fertilizers and information technology (IT) products space.
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