• Q1 financial performance: Sales grew 64% year-on-year to ₹3,583 crore, with PAT and PBT rising by 14% and 11% respectively. However, fertilizer margins contracted sharply due to escalating raw material and freight costs.
• Raw material inflation: International sulfuric acid prices rose 231% year-on-year and ammonia increased 144%, putting severe pressure on non-subsidized fertilizer grades. While urea and DAP receive government subsidy protection, high-cost NPK grade fertilizers are facing significant margin pressure.
• Sikka backward integration: The board approved a PAP plant at Sikka to be completed within 2.5 to 3 years. The project aims to produce PAP from rock phosphate and sulfuric acid internally, reducing import dependency for DAP and NPK fertilizer manufacturing.
• Industrial product challenges: Natural gas costs rose 38%, impacting non-subsidized industrial products such as caprolactam and melamine. Melamine production has been temporarily halted due to expensive spot gas and competition from cheap Chinese imports, prompting GSFC to seek anti-dumping duties or minimum import price protections.