G S F C Q1 FY27 Results (NSE: GSFC)
Signal: Margin pressure
The read
The quarter marked a sharp revenue acceleration to ₹3583.15 crore, +64.0% YoY, led by Fertilizer Products, but the margin arc weakened after the recent Q1FY26-Q3FY26 improvement: gross margin contracted 720bps to 19.1% and EBITDA margin fell to 7.4%, while PAT growth was limited to 14.4%; recovery in input-cost intensity is the key confirmation needed.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,583.15 Cr | 64.0% | +36.1% |
| EBIT | ₹212.22 Cr | 13.5% | |
| Net profit | ₹158.53 Cr | 14.4% | |
| EPS | ₹3.98 | 14.4% | |
| EBIT margin | 7.4% |
P&L walk
Revenue accelerated to ₹3583.15 crore, +64.0% YoY and +36.1% QoQ, led by Fertilizer Products, but gross margin compressed to 19.1% from 26.3% YoY and EBITDA margin fell to 7.4% from the prior-year level as input intensity rose; PAT still increased 14.4% to ₹158.53 crore.
Segments
Fertilizer Products drove the group with revenue of ₹2948.51 crore, +80.7% YoY, and segment result of ₹118.41 crore versus ₹136.34 crore YoY, while Industrial Products revenue grew only 14.8% to ₹634.64 crore but result surged to ₹115.93 crore from ₹24.72 crore.
Key positives
- Consolidated revenue reached ₹3583.15 crore, +64.0% YoY, with Fertilizer Products revenue up 80.7% to ₹2948.51 crore.
- Industrial Products segment result increased to ₹115.93 crore from ₹24.72 crore YoY despite only 14.8% revenue growth, materially diversifying earnings contribution.
- PAT of ₹158.53 crore and EPS of ₹3.98 both grew 14.4% YoY, with earnings quality classified clean and EPS tracking PAT.
- Segment assets increased 9.0% YoY to ₹16633.75 crore while depreciation rose 13.5% to ₹54.04 crore, a clean depreciation-to-asset-base cross-check.
Key concerns
- Gross margin compressed 720bps YoY to 19.1% as raw-material cost increased to 67.2% of revenue from 57.6%; the filing does not disclose the cause.
- Revenue grew 64.0% YoY but EBITDA grew only 13.5% to ₹266.26 crore, causing EBITDA margin to fall 330bps to 7.4%; this indicates cost absorption rather than operating leverage.
- Fertilizer Products segment result fell to ₹118.41 crore from ₹136.34 crore YoY even as its revenue rose 80.7%, showing weak incremental profitability in the core growth engine.
- Finance costs rose 35.1% YoY to ₹10.19 crore and 174.0% QoQ, although the absolute amount remains modest.
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