Gujarat Narmada Fertilizers Q2 Results: Profit Down 23%, To Buy Back 5.46% Stake

Gujarat Narmada Valley Fertilizers and Chemicals Ltd. reported a decline in net profit for the second quarter, amid a fall in operational revenue. 

The company's net profit fell by 23.5% year-on-year to Rs 182 crore in the quarter ended September, according to its exchange filing. 

The operational revenue of the company fell by 19.6% to Rs 2,080 crore, the statement said. 

While lower pressure on margin resulted in decline in the chemical segment, the fertiliser segment reduced mainly due to continuously reducing nutrient subsidies on complex fertiliser and lower volume, particularly of urea, the statement said. 

With improved volume availability and output prices already quite moderate, the margin profile should increase as input prices further stabilise, the company said. 

The margin have come under pressure mainly due to erosion in net sales realisations practically across the chemical products portfolio, Pankaj Joshi, IAS, managing director, said.

Gujarat Narmada Valley Q2 FY24 Highlights (YoY)

• Revenue at Rs 2,080 crore vs Rs 2,587 crore, down 19.6%.

• Ebitda at Rs 169 crore vs Rs 309 crore, down 45.3%.

• Margin at 8.1% vs 11.9%, down 381 bps.

• Net profit at Rs 182 crore vs Rs 238 crore, down 23.5%.

The company's board has approved a plan to buy back shares worth Rs 652.81 crore.  

The fertiliser manufacturer has offered to buy back up to 84.78 lakh shares—representing 5.46% of the total paid-up equity share capital at Rs 770 apiece, it said in its filing. 

The buyback price is at a premium of 11.2% to the stock's Wednesday close of Rs 692.4 apiece on the BSE.

The promoter entities owned 41.18% in the state-owned company, as on Nov. 3.

The company has set Nov. 24 as the record date for determining the equity shareholders entitled to participate in the buyback. It has appointed SBI Capital Markets Ltd. as the manager of the buyback. 

Shares of Gujarat Narmada Valley Fertilizers and Chemicals closed 1.08% higher at Rs 691.45 apiece, as compared with a 0.05% advance in the benchmark BSE Sensex on Wednesday.