Gujarat State Fertilizers & Chemicals Limited

Basic Materials — Agricultural Inputs · NSE

₹149.70+₹3.10 (+2.11%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:57 pm

Understanding the Business

Company site ↗

The 60-second version of Gujarat State Fertilizers & Chemicals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Gujarat State Fertilizers & Chemicals Limited produces and sells fertilizers and chemicals in India. The company operates in two segments, Fertilizer Products and Industrial Products.

IndustryAgricultural Inputs

SectorBasic Materials

Employees2,612

Annual revenue₹10,936 Cr

How does it make money?

Turns over ₹10,936 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 2,612 employees supports ₹4.19 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.19 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 6.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE22.3%

What is the outlook?

1 analysts covering the stock expect revenue to shrink about 6.9% and earnings to grow about 9.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth-6.9%

Est. earnings growth+9.4%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +97% while net margin moved -73% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+97%

Margin effect-73%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 6.6% is below 10% — capital is not working hard
✗ ROCE has fallen by 5.5 points — returns are eroding
✗ EBITDA margin of 9.8% is thin — little cushion if costs rise
✗ Net margin of 5.6% is slim
• Revenue has compounded at 25.4% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

45/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

87/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

8.6x

3Y Median

11.4x

40 monthly readings · mean 10.8x · range 5.5x–16.2x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 24% below its 3y median of 11.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 70% below the peer median of 28.7x.

vs. its own history

Cheap

11.4x median over 40 months · -24%

vs. sector peers

Cheap

28.7x median of 4 peers · -70%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.4x

PEG

0.60

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.22x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 10.5% to 5.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 12.1% to 6.6% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1016% over 3 years, from ₹2 Cr to ₹27 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 21.5 points, from 31.3% to 9.8%.
🟡Profit is decliningFinancial
Net profit is down 47% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 24% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 70% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 31.3% to 9.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 10.5% to 5.5%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 19% a year✓ 25.4% CAGR
Latest reported year was 64.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 9.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹172 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 6.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 1 neutral · 3 weak

Market Cap

₹5,965 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.6x

Cheap

Cheap against the generic band

P/B Ratio

0.49x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹17.38

Profitable

Profitable on a per-share basis

ROE

5.5%

Weak

Weak capital efficiency

ROCE

6.6%

Weak

Low return on total capital employed

Debt/Equity

0.22x

Low

Conservative leverage

Revenue Growth (YoY)

64.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

14.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

3.34%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹172 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

8.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

5.0%

Weak

Thin margins leave little room for error

Net Margin

5.6%

Average

Average bottom-line conversion

Current Ratio

4.83

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.33

Defensive

Steadier than the market

52W Range Position

18%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

150.4 / 155.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

37.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5,545 Cr	₹5,614 Cr	₹9,528 Cr	₹10,936 Cr	+25.4%
EBITDA	₹1,738 Cr	₹896 Cr	₹974 Cr	₹1,075 Cr	-14.8%
EBITDA Margin	31.3%	16.0%	10.2%	9.8%	—
PAT (Net Profit)	₹1,266 Cr	₹564 Cr	₹591 Cr	₹673 Cr	-19.0%
EPS	₹31.77	₹14.16	₹14.83	₹16.88	-19.0%
ROE	10.5%	4.4%	4.9%	5.5%	—
ROCE	12.1%	5.2%	5.8%	6.6%	—
Total Debt	₹2 Cr	₹5 Cr	₹2 Cr	₹27 Cr	+123.5%
Free Cash Flow	₹782 Cr	-₹508 Cr	-₹296 Cr	-₹172 Cr	—

🟢 Revenue has grown at 25.4% a year over 3 years.

🔴 EBITDA has shrunk at 14.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 31.3% to 9.8% over 3 years (-21.5 pts).

🔴 PAT (Net Profit) has shrunk at 19.0% a year over 3 years.

🔴 EPS has shrunk at 19.0% a year over 3 years.

🔴 ROE has fallen from 10.5% to 5.5% over 3 years (-5.0 pts).

🔴 ROCE has fallen from 12.1% to 6.6% over 3 years (-5.5 pts).

🔴 Total Debt has grown at 123.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹782 Cr to -₹172 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14,390 Cr

Total Liabilities

₹2,112 Cr

Cash & Equivalents

₹192 Cr

Operating Cash Flow

₹136 Cr

Capex

-₹308 Cr

Shareholding (proxy)

Institutional Holding

11.8%

Insider Holding

42.9%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

11 Sept 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹185

+23.6% vs CMP

Target Range

₹185 – ₹185

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 positive3 mixed2 general

Gujarat State Fertilizers & Chemicals Limited Just Recorded A 48% Revenue Beat: Here's What Analysts Think

Simply Wall Street, 17 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Gujarat State Fertilizers & Chemicals Q2 FY27 Results Preview: What To Expect

Univest, 18 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Gujarat State Fertilizers & Chemicals Limited Actuals & Estimates (NSE:GSFC)

TradingView, 26 Jun

GSFC Q3 Results: Profit rises 18% YoY as margin improves to 6%

CNBC TV18, 09 FebResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Gujarat State Fertilizers & Chemicals Limited Reports Earnings Results for the First Quarter Ended June 30, 2026

marketscreener.com, 12 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Tech Query: LIC Housing Finance, Samvardhana Motherson International, Gujarat State Fertilizers & Chemicals (GSFC), Caplin Point Laboratories - What Is The Outlook? Where Are These Stocks Headed?

BusinessLine, 21 Feb

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingGrowth · Risk

WeakBusiness Quality · Profitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑