G S F C Q2 FY27 Results (NSE: GSFC)
Signal: Growth decelerated
The read
The inflection is from Q1FY27's ₹3583.15 Cr revenue to Q2FY27's ₹4740.94 Cr, but growth is not translating proportionately into profit: consolidated PAT rose 26.3% YoY to ₹200.24 Cr while cost of materials reached 44.3% of revenue versus 18.7% YoY, and H1 operating cash flow turned negative at ₹129.24 Cr.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,740.94 Cr | +48.7% | +32.3% |
| Net profit | ₹200.24 Cr | +26.3% | |
| EPS | ₹5.02 | +26.1% | |
| EBIT margin | N/A |
P&L walk
Consolidated revenue increased to ₹4740.94 Cr, +48.7% YoY and +32.3% QoQ, but cost of materials rose to 44.3% of revenue from 18.7% YoY, compressing gross margin to 55.7%; PAT still rose 26.3% to ₹200.24 Cr, supported by ₹170.34 Cr of other income and ₹8.78 Cr associate profit.
Segments
Industrial Products was the faster-growing profit contributor: segment result rose 53.3% YoY to ₹181.57 Cr versus Fertilizer Products result growth of 29.4% to ₹153.16 Cr, although Fertilizer Products remained the larger ₹3937.37 Cr revenue segment.
Key positives
- Consolidated revenue rose 48.7% YoY to ₹4740.94 Cr and 32.3% QoQ, following Q1FY27 revenue growth of 64.1% YoY.
- Industrial Products segment result rose 53.3% YoY to ₹181.57 Cr, outpacing the 29.4% growth in Fertilizer Products result.
- Employee cost was effectively flat YoY at ₹192.76 Cr while consolidated revenue increased 48.7% YoY.
- EPS rose 26.1% YoY to ₹5.02, tracking PAT growth without a material dilution signal.
Key concerns
- Gross margin compressed by approximately 2,560bps YoY to 55.7% as cost of materials rose to 44.3% of revenue from 18.7%; the filing does not disclose the cause.
- H1 operating cash flow was negative at ₹129.24 Cr versus positive ₹450.92 Cr YoY, despite H1 consolidated PAT of ₹358.78 Cr.
- Inventory increased to ₹2968.82 Cr from ₹1878.77 Cr at 31-Mar-26 and government subsidies receivable rose to ₹3321.53 Cr from ₹1452.88 Cr.
- Finance costs rose to ₹14.79 Cr from ₹1.79 Cr YoY while short-term borrowings increased to ₹609.99 Cr from ₹25.00 Cr.
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