SPA Research's research report on GSFC
GSFC reported sharp 17% yoy decline in total sales volume to 353303 MT. Fertilizer sales volume declined by 19% yoy to 312017 MT. DAP sales took the biggest hit and declined 40% yoy to 81958 MT (26% of fertilizer sales) on account of excessive inventory in channel and price war.
Outlook
GSFC reported a dismal performance as volume decreased by 17% yoy. Topline and PAT declined by 30% and 41% YoY to INR 11503mn and 612mn respectively. EBITDAM contracted by 350 bps yoy to 8%. Company has decided to shift to NPK and reduce focus on DAP which is positive for fertilizer segment. Capro-Benzene spread above $1000/ton and commissioning of Nylon plant are positives for industrial segment. We maintain hold with target price of INR 105 based on SOTP valuation.
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