Buy GSFC, target of Rs 120: Emkay Global

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26 Aug, 2025 12:21

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Emkay Global's report on Gujarat State Fertilizers & ChemicalsStrong show by Fertilizer Segment• Q2FY16 result beats our estimates as fertiliser division post strong results with 24%yoy increase in EBIT. Overall EBIDTA at Rs 2.1bn is above our est of Rs 1.6bn and PAT at Rs 1.4bn vs our est of Rs 1.2bn• Chemical segment remains under pressure with pressure on Benzene – Caprolactam spread which has declined further due to softness in crude prices• Company’s fertiliser business benefits from new gas pooling policy as it witnesses margin expansion in urea while complex fertiliser business to witness contraction in margins as high inventory in the system may leads to higher discounts and increase in credit cycle• GSFC remains a value play at 40% discount to book value and 3.4x EV/EBIDTA with ~4% dividend yield. We lower target price to Rs 120 based on 1x BV(from Rs 140 as no visibility in improvement in chemical spread) but maintain our Buy reco, says Emkay Global research report.For all recommendations, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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