A brief thread on Gujarat Narmada Valley Fertilizers & Chemicals

Incorporated in 1976 by Govt of Gujarat, manufacturer & trader of fertilizers, industrial chemicals covering a wide range of products

Largest Manufacturer of Toluene Di-Isocyanate, Aniline, Acetic Acid
#GNFC (2/n)

GNFC is the sole Manufacturer of TDI in India with a market share of 70%; rest 30% is imported.

Key Financial Ratios:

Market Cap: 6,981 Cr
P/S: 1.20
D/E: 0
P/E: 7.46
ROCE: 15.8%
Promoter + FII + DII: 63.17%

FY21 Sales: 5,129 Cr
EBITDA: 1,003 Cr
OPM: 20%
#GNFC (3/n)

GNFC has a demonstrated track record of operations in both fertilizers and chemicals segments

It has to its credit one of the largest Ammonia plant, a reference plant in the world of fuel oil based technology along with the world's largest single stream Urea plant
#GNFC (4/n)
The company manufactures both urea and nitrophosphatic fertilizer and sells its products under the brand name 'Narmada' with a strong recall in multiple states.

 Nearly 65% of the company's revenue in the fertilizers segment comes from Gujarat.
#GNFC (5/n)
Industrial Products Segment:

Chemical business has contributed a mammoth 64% to the top line of the company in FY21

Aggregate sales of 7,55,275 MT

Of this, TDI made almost 27% part of the turnover. Acetic Acid, Ethyl Acetate, ANMelt, Aniline contributed almost 47%
#GNFC (6/n)
Fertilizer Business:

Company achieved total sale of 6.57 Lakh MTs of Urea in FY21

The Company sold around 42,600 MTs fertilizers through Company’s own Narmada Khedut Sahay Kendras (NKSKs), out of the total fertilizers sold by the Company in FY 21.
#GNFC (7/n)
(n)Code Solutions – IT Division

The company also offers various IT solutions and services through (n)Code Solutions - IT Division of the Company.

This division has registered sales turnover of 70 crores and Profit of 12 crores across its all business segments.
#GNFC (8/n)
The company has a diversified product profile under both fertilizers and chemicals segments that has helped the company in dealing with price volatility over the years leading to sustained profitability indicators

Global acetic acid prices are at record high
#GNFC (9/n)


Formic Acid Capacity Enhancement:
To increase the capacity by 20 MTPD (6,800 MT per
annum) by Q2FY22; Total capacity of FA would be 85 MTD

Solar Power Generation Project: 10 MW Solar Power Plant [By July 2022]
#GNFC (10/n)

Ammonia Plant revamp to increase Ammonia production by 50,000 MT per annum which will be used for new Weak Nitric Acid and Ammonium Nitrate Plants

Concentrated Nitric Acid (CNA) – IV Plant:  Company is implementing CNA-IV Project with a capacity of 150 MTD [Q1FY23]
#GNFC (11/n)
Risks: GNFC is dependent on the chemical business for its profitability and the same is exposed to volatility on account of movements in fuel prices and movements in exchange rates + Natural Gas Prices + Import parity approach linked to the exchange rate movements.
#GNFC (12/n)

Sources: Annual Report, Brickwork Rating Report, Aug 2021 Concall.

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