G N F C Q2 FY27 Results (NSE: GNFC)
Signal: Margin pressure
The read
The revenue recovery accelerated to ₹2,773 crore, up 40.9% YoY, but the margin arc broke after the prior quarter's expansion: EBITDA margin fell to 7.1% from 9.4% YoY and 17.6% QoQ as raw-material intensity rose to 53.1%; Chemicals remained profitable at ₹177 crore while Fertilizers stayed loss-making at ₹38 crore.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,773 Cr | +40.9% | +23.9% |
| Net profit | ₹194 Cr | +8.4% | |
| EPS | ₹13.2 | +8.4% | |
| EBIT margin | 7.1% |
P&L walk
Revenue increased to ₹2,773 crore, up 40.9% YoY and 23.9% QoQ, but gross margin compressed to 37.7% from 45.0% as raw-material intensity rose to 53.1%; EBITDA increased only 6.5% YoY to ₹197 crore and PAT rose 8.4% to ₹194 crore, helped by ₹9 crore of associate profit.
Segments
Chemicals drove the group with ₹1,631 crore revenue and ₹177 crore segment profit, while Fertilizers remained the drag with ₹1,117 crore revenue and a ₹38 crore loss; Chemicals contributed 91% of total segment result of ₹151 crore.
Key positives
- Revenue rose 40.9% YoY to ₹2,773 crore and 23.9% QoQ, extending the top-line recovery from ₹1,968 crore in Q2FY26.
- Chemicals segment revenue increased 40.4% YoY to ₹1,631 crore and segment profit rose 12.0% YoY to ₹177 crore.
- Finance costs remained negligible at ₹1 crore versus ₹1 crore YoY, and consolidated EPS tracked PAT with 8.4% YoY growth to ₹13.20.
- PPE rose to ₹3,025 crore from ₹2,595 crore at March 2026 while H1 capex payments were ₹332 crore, indicating continued investment despite lower CWIP.
Key concerns
- Gross margin contracted 730bps YoY to 37.7% as raw materials reached 53.1% of revenue versus 52.1% a year ago; with revenue growing but margin compressing, the filing provides no evidence of full cost pass-through.
- EBITDA increased only 6.5% YoY to ₹197 crore versus 40.9% revenue growth, and EBITDA margin fell 230bps YoY to 7.1%.
- Fertilizers remained loss-making at ₹38 crore versus a ₹35 crore loss a year ago, despite fertilizer revenue rising 43.0% YoY to ₹1,117 crore.
- H1 operating cash flow fell to ₹141 crore from ₹314 crore while receivables increased to ₹969 crore from ₹641 crore and inventories to ₹1,259 crore from ₹1,018 crore.
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