Gujarat State Fertilizers & Chem CFO says FY24 margins will hinge on kharif crop as Q4 net dips 21%

Some of the upcoming projects of the company include the ammonium sulphate unit of 1.32 lakh TPA and the crystal project of 6,600 TPA.

V.D. Nanavaty, Executive Director (Finance) & CFO at Gujarat State Fertilizers and Chemicals, told CNBC-TV18 on May 26, "the phosphatic and potassic (P&K) subsidy has been lowered due to lowering of input costs.”

The company targets to maintain the same revenues in FY24 as FY23, but margins are expected to remain under pressure. In FY23, the company clocked Rs 11,298 crore revenue, up 26 percent. EBITDA stood 23 percent higher at Rs 1,618 crore and net profit improved 45 percent to Rs 1,293 crore The company now has cash reserves in excess of Rs 1,400 crore.

"The margins for FY24 will be dependent on the subsidies for the kharif season," Nanavaty said.

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Nanavaty  added that ammonia prices have come down. At the the company's Sikka DAP plant, about 1-2 lakh tonnes per annum (TPA) of ammonia is imported. However, for the Baroda unit, the company has an in-house ammonia plant. Of the company's total 6-7 lakh-tonne ammonia requirement, nearly 4 lakh tonnes is captive.

The company has huge capex lined up for FY24. The cash outflow during this year is expected at Rs 700 crore. Also, the capex plan in the medium term is Rs 8,000 crore, which is equally split between the Baroda and Dahej plants.

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