Gujarat Narmada Valley Fertilizers & Chemicals Ltd Management Discussions

1. Global & Indian Economic Scenario:

Over the past year, the global economy has experienced a slowdown marked by persistent inflation and geopolitical instability, resulting in a cautious outlook; conversely, Indias economy has shown significant resilience, retaining its status as the fastest- growing major economy, driven by robust domestic consumption, government expenditure, and a dynamic manufacturing and services sector, positioning it as a standout performer in a more difficult global context.

2. Industry Structure and Development:

2.1. Fertilizer Industry

Climatic Conditions

Rainfall over the country as a whole during the 2024 southwest monsoon season (June -September) was 108% of its long-period average of 50 years. Thus, the seasonal rainfall was above normal (>104% of LPA) as per the IMD forecast.

The month-wise distribution of rainfall during the SW Monsoon 2024 was as follows.

	June 2024	July 2024	Aug 2024	Sept 2024	SW Monsoon 2024
Actual	147.2	306.6	295.2	185.8	934.8
Normal	165.3	280.5	254.9	167.9	868.6
% departure	-10.95%	9.30%	15.81%	10.66%	7.62%
Source: IMD; rainfall figures in mm.

The same figures for SW Monsoon 2023 are given in the table below.

	June 2023	July 2023	Aug 2023	Sept 2023	SW Monsoon 2023
Actual	148.6	318.4	162.7	190.3	820
Normal	165.3	280.5	254.9	167.9	868.6
% departure	-10.1%	+ 13.5%	-36.2%	+ 13.34%	-5.55%

Source: IMD; rainfall figures in mm.

Seasonal rainfalls over Northwest India, Central India, South Peninsula and Northeast (NE) India were 107%, 119%, 114% and 86% of respective LPA.

The southwest monsoon seasonal (June to September) rainfall over the monsoon core zone, which consists of most of the rain fed agriculture regions in the country received 122% of LPA.

The monsoon registered excess precipitation than normal. Above normal rainfall in the country ensured coverage of normal acreages in Kharif 2024.

Acreages

Kharif (Apr to Sep) - Against Kharif normal acreage (average of previous 5 years) of 1096 Lakh hectare, the country had achieved 1105 Lakh hectare registering 1% growth over normal.

Progress - KHARIF area coverage - As on 20.09.2024 - Lakh Hectare

Crop	Normal	Actual		Variance over FY		Coverage
	Acreage Kharif	2024-25	2023-24	Acreage	%	(%) against Normal of Season
Paddy	402	414	405	9.00	2.22	103
Pulses	136	129	119	9.30	0.08	95
Course Cereals	181	193	186	6.48	0.03	106
Oilseeds	190	194	191	2.92	0.02	102
Sugarcane	51	58	57	0.57	0.01	113
Jute & Mesta	7	6	7	(0.93)	(0.14)	85
Cotton	129	113	124	(10.95)	(0.09)	87
Total	1,096	1,105	1,088	16.39	0.02	101

Rabi (Oct-Mar) - In Rabi, country has achieved 661 Lakh hectare compared to normal acreage of 635 Lakh hectare.

Progress - KHARIF area coverage - As on 20.09.2024 - Lakh Hectare

Crop	Normal	Actual		Variance over FY		Coverage
	Acreage Kharif	2024-25	2023-24	Acreage	%	(%) against Normal of Season
Wheat	312	325	318	6.55	0.02	104
Rice	42	43	41	1.95	4.80	101
Pulses	140	141	138	3.09	0.02	100
Course Cereals	53	55	55	(0.21)	(0.00)	103
Oilseeds	87	97	99	(1.76)	(0.02)	112
Total	635	661	651	10	5	104

Source - https://www.agricoop.gov.in/all-india-crop-situation

In Kharif, the acreages of paddy, Coarse Cereals and Oilseeds increased over normal and the acreages of Cotton & Jute decreased over PY. In Rabi acreages of Wheat, Oilseeds, Coarse Cereals and Pulses have increased over normal and the acreages of Coarse Cereals and Oilseeds decreased over PY.

As per the advance estimates of Department of Agriculture and Farmer welfare, total food grain production in 2024-25 is estimated to be 330.9 million tonnes (mt), against food grain production in the 2023-24 crop year which was pegged at 309 mt. The increase in production is contributed by almost all the crops).

Minimum Support Price (MSP)

The MSPs of most of Kharif & Rabi crops are increased over 2023-24.

CROPS	FY24	FY25	% Increase
Paddy	2,183	2,300	5%
Jowar	3,180	3,371	6%
Bajra	2,500	2,625	5%
Maize	2,090	2,225	6%
Tur (Arhar)	7,000	7,550	8%
Moong	8,558	8,682	1%
Urad	6,950	7,400	6%
Cotton	6,620	7,121	8%
Groundnut	6,377	6,783	6%
Soybean	4,600	4,892	6%
Sesamum	8,635	9,267	7%
Wheat	2,275	2,425	7%
Barley	1,850	1,980	7%
Gram	5,440	5,650	4%
Lentil (Masur)	6,425	6,700	4%
Rapeseed & Mustard	5,650	5,950	5%
Safflower	5,800	5,940	2%

Source - https://farmer.gov.in/mspstatements.aspx

MSPs are increased by 2% to 8% over previous year. Going by the past three years data, the impact of the Minimum Support Price was almost nil on 12 of the 17 crops covered under MSP Scheme.

Government Policies - Fertilizers

No major changes in Policy have been announced during the year, except to continue reasonability of MRP/Discounts/margins guidelines on fertilizers governed through NBS policy.

GoI has strengthened efforts in setting up all fertilizer retail outlets into "Pradhan Mantri Kisan Samriddhi Kendra (PMKSK)". The cost of conversion is continued to be met from the retailer margin being retained by the companies. There is no direct cost to companies.

GoI has started Namo Drone Didi initiative and have provided 1,100 drones to ladies pilots, who have been trained for using drones for spray on crops. Another 14,500 Drones shall be funded by GoI in next two years. The technology and the women empowerment goes hand in hand.

PM-PRANAM Scheme is continued in the FY25 with MDA (Market Development Assistance) of Rs 1,500 per MT on sales of Fermented Organic Manure (FOM, by-product of CBG Units under GOBARdhan Scheme).

Rates for Nutrient Based Subsidy (NBS) for the Kharif 2025 (01.04.2024 to 30.09.2024) and Rabi 2024-25 (01.10.2024 to 31.03.2025) are mentioned below.

Subsidy - Rs/MT

Product	Kharif 2024	Rabi 2024-25	Change	% Change
DAP	25,176	25,411	235	1
ANP	15,148	14,764	-384	-3
20:20:0:13	15,395	14,993	-402	-3
SSP	4,804	5,121	317	7
MOP	1,427	1,427	0	0

Comparison of NBS rates for Rabi 2023-24 & Rabi 2024-25 is given below.

Product	Rabi 2023-24	Rabi 2024-25	Change	% Change
DAP	22,541	25,411	2,870	13
ANP	13,568	14,764	1,196	9
20:20:0:13	13,814	14,993	1,179	9
SSP	3,540	5,121	1,581	45
MOP	1,427	1,427	0	0

Rates for Nutrient Based Subsidy (NBS) for the Kharif 2025 (01.04.2025 to 30.09.2025) have been announced in advance. Comparison of NBS rates for Rabi 2024-25 & Kharif 2025 is given below.

Subsidy - Rs/MT

Product	Rabi 2024-25	Kharif 2025	Increase	% Increase
DAP	25,411	31,299	5,888	23
ANP	14,764	17,324	2,560	17
20:20:0:13	14,993	17,663	2,670	18
SSP	5,121	7,263	2,142	42
MOP	1,427	1,428	1	0

There was no major change in the prices of DAP & Rock Phosphate during the year 2024-25. The GoI has ensured price control in DAP which was kept at 1,350 per bag MRP level. Reimbursement of "other costs" @ Rs 3500 pmt is continued for Kharif25 in DAP like last Rabi24-25. There is an additional provision of reimbursement of GST component included in MRP.

International Fertilizer Price - (USD/MT)

Product	Mar24	Mar25	% change
DAP	583	640	10%
Rock Phosphate	203	175	-14%
Phos. Acid	968	1060	10%
Urea	323	425	32%
Natural Gas (MMBTu)	1.54	4.11	167%
Ammonia	445	454	2%
MOP	319	283	-11%

Incoterms- FOB-Urea, CFR-Others

Source - https://www.fert.nic.in/sites/default/files/2020-082025-05/Monthly_Bulletin_March_2025_english.pdf

Fertilizer - Production, Imports & Consumption

Production & Import of Urea & DAP decreased over FY24. Sales of Urea, NPK, MOP & SSP increased and sales of DAP decreased.

Fertilizer	2024-25 (Lakh MT)			2023-24 (Lakh MT)
	Production	Import	Sales	Production	Import	Sales
Urea	306	56	388	314	70	358
DAP	38	46	93	43	56	108
NP/NPK	113	23	142	95	22	111
MOP	0	35	22	0	29	16
SSP	52	0	49	44	0	45
Total	509	160	694	496	177	638

During FY 2024-25, production of Urea & DAP decreased whereas production of NPKs & SSP increased over FY24. Imports of Urea & DAP reduced over FY23-24. Sales of NPK & MOP increased and sales of SSP decreased.

% Variance over FY 23-24

Fertilizer	Production	Import	Sales
Urea	-3%	-25%	8%
DAP	-13%	-22%	-16%
NPKS	16%	4%	22%
MOP	NA	17%	27%
SSP	15%	NA	8%
Total	3%	-11%	8%

Source - https://reports.dbtfert.nic.in/

Closing stock (LMT) as on 31.03.2025, in the country is less compared to previous year (as on 31.03.2024) Urea-55.96 (79.83), DAP-9.15 (17.75), NPK-34.04 (40.16) where as there is more stock compared to previous year in case of MOP - 8.83 (6.36) &,,SSP-21.58 (18.70).

2.2. Chemical Industry

The Chemical Sector is a fundamental pillar within the Indian economic framework, playing a pivotal role in contributing to the countrys financial stability and growth. The Indian chemical industry has maintained its position as the sixth and third largest producer of chemicals in the world and Asia, respectively. However, it is still a small part of the global value chain, contributing about 2.6% to the global chemical industry and is expected to reach US$304 billion by 2025. India is expected to be well positioned to capture a larger share of the global Chemical and Petrochemical (CPC) markets through 2030, doubling its share from 2020.

The Indian chemicals industry exhibits significant upside potential as companies expand product offerings, since India chemicals are tracking a path similar to their European peers, which saw value creation of over US$200 billion since 2005. Indian chemicals industry is at the second stage of the value-creation cycle with multiple upside levers ahead, including rapid expansion by investments and added capacities, transformation through vertical integration and other future mega trends.

3. Opportunities and Strengths:

a. In chemical segment, to cater to demand growth, profitable opportunities are being explored in different chemicals. Major benefits envisaged from change of worlds view about China post pandemic.

b. Company has entered into Long/Mid Term / Annual Contracts / Agreements for supplies of most of the critical Raw Materials like Coal, Oil, Rock Phosphate, Packaging Materials etc. which are essential for continuous production. Company is continuously trying for broad basing supplier base.

c. In respect of fertilizers and chemicals, both, trading is another opportunity which is being explored.

d. For IT business, areas like software, e-Governance to support ever evolving client requirements are likely focus area apart from looking at evolving technologies for foray.

4. Segment-wise performance for FY 2024-25: Rs. Crores

Segment	Revenue	Revenue %	Result	Result %
Fertilizers	2,900	37%	(180)	(35%)
Chemicals	4,900	62%	665	131%
Others	92	1%	23	4%
Total	7,892	100%	508	100%

Fertilizer Segment revenue has been decreased by Rs. 154 Crores from Rs. 3,054 Crores to Rs. 2,900 Crores mainly due to lower volume in Neem Urea & Fertilizer trading partially compensated by higher volume & realization of complex fertilizer and claimable subsidy of Urea in view of higher variable cost. Fertilizer Segment Results improved from loss of Rs. (244) Crores to loss of Rs. (180) Crores, improved by 26% at Rs. 64 Crores mainly due to decrease in input cost of complex fertilizer, decrease in fixed cost of both the fertilizer products and higher volume in both the fertilizer products partially offset by higher energy norms in Neem Urea due to scheduled maintenance of Gas based power plant.

Chemical Segment revenue increased by Rs. 174 Crores from Rs. 4,726 Crores to Rs. 4,900 Crores due to higher volume in all the products except TDI (due to annual maintenance shutdown in Q 1 FY 23-24 at Bharuch and Annual shutdown at Dahej during H 1 24-25), Ethyl Acetate (due to priority to AA sale), which partially got offset by lower realization in all the products except AN Melt, Technical grade urea, Aniline and Formic Acid. Chemical Segment Results increased from Rs. 542 Crores to Rs. 665 Crores higher by 23% at Rs. 123 Crores mainly due to decrease in input cost, fixed cost and higher volume partially offset by annual shutdown at TDI Dahej plant and decrease in realization.

The other segment revenue decreased by Rs. 58 Crores from Rs. 150 Crores to Rs. 92 Crores mainly due to decrease in revenue of IT services provided by (n)Code Solutions. The other segment results decreased from Rs. 45 Crores to Rs. 23 Crores lower by 49% at Rs. 22 Crores mainly due to lower profitability of IT services.

5. Outlook:

5.1. Fertilizers Business:

The India Meteorological Department (IMD) is predicting/forecasting above-normal monsoon for the second consecutive year in 2025. As per the IMD, average or normal rainfall is ranging between 96% and 104% of a 50-year average of 868 mm (~87cm, ~35 inches) for the four-month season (South West Monsoon -June to Sep).

Looking at the low Urea opening stock at country level compared to previous year, Urea will continue to get sold as per availability and on normal terms.

Due to upward revision in NBS rates for Kharif-25, expecting better realization for ANP product and good monsoon will enhance the scope for the same. As always, there will be a preference to DAP due to low MRP with higher nutrients and the grade is well accepted by the Indian farmers. Looking at the opening stock of fertilizers for the year, prediction of good south west monsoon, good crop yields during last year, better prices etc is good for the fertilizers business.

Due to limited production, Fertilizer business team is exploring/focusing on enhancing trading activities for both bulks (subsidized) & non-bulk (non-subsidized) in the agri inputs sector thru retail outlets (COCO model) as well as thru dealer/wholesale network. Under PM-PRANAM program, we are promoting FOM (Fermented Organic Manure) under MDA scheme. Apart from this, company is supporting initiatives taken by DOF/fertilizer ministry/Agri dept like Namo Drone Didi scheme, PMKSK, PM-Kisaan Sangosthi, PM-PRANAM, DBT (PoS)etc.

5.2. Chemicals Business:

The chemicals industrys revenues grew at a CAGR of about 10.5 percent between fiscal years 2018 and 2024, compared to Indias GDP growth of around 9 percent during the same period. With industry revenue outpacing GDP growth, Indias chemicals industry has contributed to the countrys economic expansion. Despite dropping industry margins and the impact of macroeconomic pressures, revenue growth remains encouraging. The industry seems positioned as a relatively resilient, high-growth market garnering domestic as well the global demand.

Risk and concerns:

a. Most products are import substitutes and hence fierce competition from dominant foreign suppliers is a major threat.

b. Key raw materials and feedstock are purchased at import parity price and its availability from limited supplier base and at time almost single pre-dominant source operates as possible threat to profitable operations.

c. NBS support from time to time may not match with actual input costs hence may affect profitable operations.

d. Energy norms for fertilizers being prescribed without capital subsidy support increases further strain on resources is a source of major risk.

6. Internal control system, their adequacy and Risk Management:

The Company has an independent Internal Audit function with a well-established risk management framework. The scope and authority of the Internal Audit function are derived from the Internal Audit Charter approved by the Audit Committee.

The Company has engaged a reputable external firm to support the Internal Audit function for carrying out the Internal Audit reviews.

The Audit Committee meets every quarter to review and discuss the various Internal Audit reports and follow up action plans of past significant audit issues and compliance with the audit plan.

The Internal Financial Control framework of the company is subjected to review every year independently.

The Company has well-defined Enterprise Risk Management (ERM) framework in place which evolved over the years.

Risk Management:

Risks are identified proactively periodically considering inputs from external as well as internal factors along with risk mitigation plans. The company has well defined Governance Structure viz., from Board to Committee to Risk Management function.

Company has developed the digital risk management platform where through the mechanism of action taken reports, the identified mitigation plans are monitored for their execution / current status against their set target dates.

Risk Management Committee meeting takes place twice during the year wherein the framework as well as various risks are reviewed thoroughly. In addition to this, Risk Management Report covering various risks is put-up before the Board of Directors Meetings periodically for their review.

7. Operational & Financial performance

7.1. Operational Performance (Production):

The Company has achieved remarkable production performance during the year 2024-25. Day to day plant operations were closely reviewed and plant operations were optimized accordingly, to maximize profit. During the year, strategic optimization of various plant operations had to be done keeping in line with prices of raw materials so as to achieve cost reduction in all aspects.

New Records Established:

During the year 2024-25, in all, 68 nos. of new records were established, out of which 43 nos. of new records were established in Production and 25 nos. in Dispatch /sale. Ever highest daily production achieved for Technical Grade Urea, Methyl Formate, Formic acid, WNA-II, CNA-IV, Nitro benzene, DNT-Bharuch, Technical Grade Urea Bagging.

Ever highest Monthly production achieved for Technical Grade Urea, Methyl Formate, Formic acid, WNA-II, CNA-IV, Nitro benzene, Aniline, TDI-I, Technical Grade Urea Bagging.

Production/ Operational Performance: 2024-25

Ammonia plant, achieved a significant milestone with highest ever production even with anxiety of Ammonia product cooler (E-706) leakage. Single/Dual gasifier operation were meticulously planned considering NCU/TGU production. Ammonia storage tank replaced from single wall to double wall & lined up on 22nd June 2024. Retrofit of turbine of refrigeration compressor and Synthesis gas compressor for energy saving is under active consideration.

In Ammonia synthesis gas generation plant (ASGP) plant, the Reformer crossed 1,00,000 lac running hours. ASGP plant operated at low load due to burner block hotspot and high tube skin temperature & plant load optimized accordingly. Energy saving scheme for NG preheating with process condensate is under execution & hydrogen compressor will be installed on delivery.

Urea plant witnessed a Golden year in its history achieving highest ever yearly total urea and technical grade urea production. The plant achieved lowest HPSH equivalent specific steam & power consumption. New higher capacity urea molten pump successfully commissioned and MP carbamate pump erection work is under progress. Civil work & procurement of VFD for torque converter replacement in HP ammonia pump for energy optimization is under progress.

Methanol-I/SGGU/MSU plants remained inoperative throughout the year due to unfavorable cost economics.

In Methanol-II plant, plant operated from April to Nov.24 as per NG availability. Thereafter, remained under shutdown due to economics. Captive consumption requirements for Formic acid & Acetic acid plants are met by sourcing methanol from market. Extra wet methanol of FA plant is purified in Methanol Distillation Unit as the drying column of FA is not designed for higher load. PSA continue to operate on oil-based gases after Methanol-II shutdown.

In Formic Acid plant, both MF and FA have set new milestones in production levels. To independently treat wet methanol of FA plant and to prevent metal contaminants going to Acetic acid plant, provisions done for separate storage of bought out methanol & FA reprocessed methanol. This has resulted into Methanol distillation unit (MDU) operation on fortnightly basis for @ 2-3 days. Daily and Monthly highest MF sale is also recorded during the year.

Acetic Acid plant, established a stable plant operation and lowest NIL production days with best Ir-Ru catalyst consumption, showing its strength and consistency.

Ethyl Acetate plant, operated steadily during the year without any major leakages in Reactor and Reactive Distillation Column. Swinging economics and stock situations prevented from achieving highest annual production. Yet, highest batch production of 38222 MT in 195 days was achieved. Daily drum filling record was achieved during the year.

CATSOL Unit, fulfilled annual order of 760.35 MT catalyst supply, marking a fivefold leap than previous years. This years order is yet to be finalized.

IP Filling Station has set new milestones in dispatching Daily/Yearly CNA, Monthly Methyl Formate, Daily/Yearly Formic Acid.

In WNA-I plant, in Apr.24 shutdown, a specialized agency conducted chemical cleaning and high-pressure jetting of Waste heat boiler coils to enhance performance & enable significant recovery of precious metal dust. Specialized cleaning of WNA storage tanks resulted in substantial gains due to recovery of precious metals. In Oct.24 shutdown, De-N2O Envicat catalyst were installed in reactor to reduce greenhouse gas emissions. Within 6 months, reduction of @ 2,60,880 MTs of CO2-equivalent emissions achieved with potential to further decrease it by @ 5,20,000 MTs annually.

In WNA-II plant, in Oct.24 shutdown, chemical cleaning of reactor, high pressure hydrojetting of Nox condensor, replacement of inter-stage cooler from aluminum to SS, tail gas expander IGV replacement resulted in higher plant performance.

In CNA-II Plant, as part of ongoing safety improvements, base plates and floor tiles on the first floor have been replaced.

In CNA-III plant, highest ever on stream hours achieved along with continuous running hours record.

In CNA-IV plant, record of highest ever on stream hours achieved.

ANP plant, was operated as per WNA availability and product priority. In rock phosphate area to unload higher capacity dumpers inside silo, increasing height of third silo (2A) is under progress. AN Melt transfer loop line erected & commissioned for in-house chemical cleaning without affecting production.

In Steam & Power generation plant, Operational philosophy for power generation was optimized due to higher fuel prices. For environment protection, Sprinklers and dust fall wall installed and tree plantation done at Coal Handling Plant.

In Utility Group of Plants, uninterrupted supply of all the Utilities were done. Resins of Cation-A & D ion exchangers were replaced to enhance efficiency. To enhance fire fighting capacity, Diesel driven fire water pump commissioned & taken in service while other pump is installed & its commissioning activities are under progress. Fire pump-house of Aniline-TDI and Fertilizer group have been interconnected to improve reliability.

Aniline Plant was operated for 356 on-stream days. Plant was operated with occasional lower load as per prevailing marketing conditions of Aniline, NB & CNA. Energy conservation Turbine (ECT) generated 78,24,310 kWh of power. Nitrobenzene and Aniline plants achieved lowest Nil production days.

TDI Plant was operated for 358 on-stream days. In line with prevailing international market & to cater to customers requirement, TDI was manufactured using a new Antioxidant (LeNox 1076) & usage of BHT stopped. Highest ever quantity of TDI was dispatched in road tankers. Amine Water was sent to TDI-II Dahej and Red water was sent to external agency for further treatment & disposal. Incinerator-2 with SCC roof detachment incident root cause analysis (RCA) study has been given to external agency & report awaited. Internal oil leakage in LIST Reactor started since June24, however the plant operation was continued with changes in operational philosophy. PdCl2 & PtCl4 recovered mainly from MTD spent catalyst and sent to TDI-II Dahej to curtail fresh procurement.

TDI-II Dahej Plant operated for 208 on-stream days with capacity utilization of 59.70%. The production levels were lower than expected due to several factors like three power failures from state grid & planned shutdown of 54 days which was got extended to 125 days. Unforeseen failure of TAR concentrator reboiler, secondary reboiler pump & suction line leakage of purification reboiler pump, replacement of vent & caustic scrubber catch tank and suction line of secondary reboiler pump resulted in delays of the planned shutdown activities. The start-up got delayed due to various operational issues.

All three VAM machines have been replaced with electrically driven screw chillers which has resulted in steady chilled water supply to consumer plants in peak summer.

ISO 14001:2015 and ISO 45001:2018 certificates from M/s. Bureau Veritas (India) Pvt Ltd for GNFC complex Bharuch are valid up to 03rd September 2025.

ISO 9001:2015 and ISO 50001:2018 certificates from M/s. Bureau Veritas (India) Pvt Ltd for GNFC complex Bharuch is valid up to 07th May 2027 & 13th June 2027 respectively.

ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ISO 50001:2018 certificates from M/s. Bureau of Veritas India Ltd for GNFC Dahej complex is valid up to 17th December 2025.

Re-certification audit of ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ISO 50001:2018 has been conducted by M/s. Bureau of Veritas India Ltd in March 2025 for GNFC Bharuch & Dahej Complex for combine certification. M/s. Bureau of Veritas India Ltd recommended for continuity of certification which will be valid for next three years. However, certificates are awaited.

7.2. Sales Performance:

"Qty. in LMT"

Fertilizers Sales performance

GNFC Sales during FY25 is more (marginally) in Urea, however, there is decrease in ANP sales by 9% compared to FY24 on account of comparatively lower availability/production during FY25.

"Qty. in LMT"

Trading operations continued and overall quantum is 27% lower compared to last year mainly due to non-availability of DAP (decreased by > 50% compare to last year).

Fertilizer Trading (MT)

Products	FY24-25	FY23-24	Variance MT	% Variance
City Compost/FOM	5,472	2,665	2,807	105%
DAP/TSP	10,958	23,477	(12,519)	-53%
SSP	3,815	4,382	(567)	-13%
MOP	1,168	1,167	1	0%
UREA (Traded)	744	197	547	278%
Ammo. Sulphate	2,164	2,180	(16)	-1%
NPKs/Poly Sulphate	457	0	457	NA
Total	24,778	34,068	(9,290)	-27%

In addition, an attempt was made to have a stronger synergy with GATL (wholly owned subsidiary of GSFC), we sold non bulk agro products worth Rs 78 Lakh through our retail outlets during FY25 and earned profit margin of Rs. 15 Lakh during FY25. We halve also started trading of Agrochemicals manufactured by M/s IFFCO-MC from our retail outlets. Besides, we supplied 490 MT of Urea & 220 MT ANP to GATL retail outlets in Gujarat & Rajasthan.

NEEM AGRI PRODUCT: The sale of neem oil pesticide has significantly increased over last year (FY25-34065 L vs FY24-21440 L, by registering a record growth of 59%). Normally, we sell two variants of neem oil pesticide viz 300 ppm & 1500 ppm and received good feedback from the farmers.

Chemicals sales performance

GNFCs products have better resonance due to their application and use in different end use sectors. Hence, several industrial products of GNFC outperformed against the previous year viz. Technical Grade Urea, Acetic Acid, AN Melt, Formic Acid, Concentrated Nitric Acid (CNA), Aniline and Methanol. Milestone was created by achieving highest ever annual sales for some of our main products like TGU and Formic Acid in FY 2024-25. TGU, TDI & AN Melt made 20%, 19% & 15% share of the industrial products turnover respectively in the FY 2024-25.

7.3. Materials Management

Feed stock availability

Since inception of GNFC, IOCL has been meeting our entire requirement of petroleum feed-stock (HSFO/LSHS-P/FOHV). The pricing terms under the supply contract are finalized every year. The current agreement signed between GNFC and IOCL for supply of FOHV, LSHS-P and HSFO is valid up to 30-4-2029.

Long Term Contracts

Company has entered into Long Term / Annual Contracts / Agreements for supplies of most of the critical Raw Materials like Coal, FOHV/FO, Natural gas, Rock Phosphate, Benzene, Toluene etc. and Packaging Materials, which are essential for continuous production.

Vendor Registration / Vendor Management

To have resourceful, competitive and cost-effective vendors in approved list, continuous efforts are being made to enlarge vendor base for supply of goods. In 2024-25, total 290 new applications were processed for vendor registration and 9 new vendors added in the vendor list. This will help in increasing competition and improvement in delivery of goods.

Disposal of Used Equipment / Scrap

With the sustained team efforts, the disposal of used equipment / scraps and surplus items worth Rs. 1,583.43 Lakh was achieved during 2024-25.

(Amount in Rs. Lakh)

LOCATION	SCRAP DISPOSAL	SURPLUS DISPOSAL	TOTAL
BHARUCH	825.31	693.65	1,518.96
TDI-II DAHEJ	59.6	4.87	64.47
TOTAL	884.91	698.52	1,583.43

Outlook for 2025-26

On raw material front;

/ FOHV/HSFO/LSHS-P

Their prices vary depending on International crude prices. Recently, international Crude Oil prices are having downward trend. The Crude prices are difficult to forecast especially due to current geo-political disturbances.

/ Coal

GNFC has been getting Indian Coal under the ambit of Fuel Supply Agreement (FSA) with M/s South Eastern Coalfields Limited (SECL) a subsidiary of Coal India Limited (CIL). FSA between GNFC and SECL is renewed w.e.f. 01-05-2023 and valid up to 30-04-2028.

Indian Coal is being utilized for the production of Urea Fertilizer and accordingly, the annual contract quantity has been reduced to 2.2 lakh MT. For the requirement of Coal towards balance plants, Imported Coal is being procured through competitive bidding and subsequently Reverse Auction is being conducted on nCode portal.

/ Benzene and Toluene

Benzene and Toluene are being procured on Import Price Parity basis. During the FY 2024-25, the average annual purchase rate of Benzene increased from Rs. 80,927/- to Rs. 88,151/- (8.93%) and the average annual purchase rate of Toluene decreased from Rs. 91,103/- to Rs. 83,363/- (8.50%) PMT as compared to FY 2023-24, on Net of Credit basis.

Currently, the commodity prices are highly volatile. It is anticipated that, the prices will remain volatile during 2025-26 till global business stability established. As a result, it is expected that aromatic market will remain unpredictable during FY 2025-26. Exchange rate for INR / USD is also one of the concern/s.

Considering above points of view, an annualized average prices of both Benzene and Toluene are expected to remain volatile during FY 2025-26.

/ Rock Phosphate

Phosphoric Acid prices:

During FY-2023-24 Phosphoric Acid prices were in the range of USD 850 - 985 PMT. During FY 2024-25 it is increased in the range of USD 948 - 1,055 PMT. Phosphoric Acid prices for Apr-June-2025 is declared as USD 1,153 PMT.

Reduction in YoY Prices for Jordan origin Rock Phosphate 73/75 BPL grade is observed till First half of 2025. However, during Second Half of 2025. Rock Phosphate prices are likely to increase.

Due to geo-political disturbances in Red Sea area, Ocean freight charges have remained concern during last year. However, it is expected that, the geo-political tension will be eased out and freight rates will stabilize during FY 2025-26.

/ Natural Gas

Our total natural gas requirement for Urea production is met up to June 2026 through competitive Long term /Medium Term contracts. However, if any short fall in natural gas supply is found then the same can be mitigated by submitting our monthly deficit gas requirement to EPMC (pooling for Urea gas) or by floating spot tenders.

Total gas requirement for industrial products is being met by floating monthly spot tenders and/or through contract finalization on competitive bidding for Short or Medium term basis.

Projection of future price trend of natural gas remains higher, however, it is very difficult to forecast natural gas prices considering high volatility, supply-demand and geo-political disturbances.

8. Comparative Financial Performance Highlights:

Charts A and B illustrate GNFCs financial performance

Chart A: EBITDA and EBITDA %

Particulars	FY 24-25	FY 23-24	Change
			Value	%
Revenue from operations	7,892	7,930	(38)	(0%)
Other income	501	469	32	7%
EBITDA @	615	503	112	22%
PBT	790	651	139	21%
PAT	585	485	100	21%
Book value ( Per share)	575	558	17	3%
EPS ( Per share)	39.85	31.67	8.18	26%

@ EBITDA Excludes Other income

During FY 24-25 RFO is lower as compared to FY 23-24 mainly due to prolonged maintenance shutdown of TDI - Dahej plant. Revenue is further affected by sales realisation in most of chemical products. Lower revenue is offset by higher volume in most of the products at Bharuch complex since there was annual planned maintenance shutdown at Bharuch during FY 23-24 resulting into lower volume in most of the products in that period.

There is a better financial performance on the back of operating performance where PBT improved by 21% for the full year. The improved results is attributable to improved volumes apart from lower feed and fuel prices helping margin improvement. At Dahej complex, the shutdown period impacted the sales volume.

Cash Flow Summary

Particulars	FY 24-25	FY 23-24	Change
			Value	%
Operating cash flow before working capital changes	748	648	100	15%
Net change in working capital	38	(404)	442	109%
Taxes paid	(180)	(212)	32	15%
Net cash from operating activities	606	32	574	1,794%
Net cash from / (used in) investing activities	(466)	1,235	(1,701)	(138%)
Net cash (used in) financing activities	(262)	(1,281)	1,019	80%
Net (Decrease) in cash & cash equivalent	(122)	(14)	(108)	(771%)

During FY 24-25, Operating cash flows are higher due to subsidy release support from GoI. Further, Outflow for investment activities represents investments in deposit and Capex expenditure whereas outflow of financing activity is mainly payment of dividend.

During FY 23-24, the highest ever dividend payment as well as first ever Share Buyback Program of ~ 461 and ~ 802 crores, respectively, are the main reasons for cash outflow under financing activities whereas the positive investment activities refer to liquidation of cash deposit positions held for meeting the needs of financing activities.

9. Material development in Human Resources/ Industrial Relations front including number of people employed

The companys Human Resource is a highly valued contributor to the success of business of the company. Ensuring well-being of employees on the job and off the job remains top priority of the company with focused attention to provide an inclusive environment for promoting diversity in gender, age and culture and inculcating organizational values and ethics.

The company makes all possible efforts for maintaining work life balance and improving the well-being of its employees through various welfare schemes leading to an atmosphere conducive to sustained growth of the company. The company conducts various In-house training programs on safety awareness, environmental protection, health awareness, awareness on sexual harassment policy, as also, for enhancing employees skill and knowledge.

The companys proactive actions have resulted in harmonious, cordial and healthy industrial relations throughout the year which has helped in sustained growth and enrichment of value for the shareholders.

Rightsizing of the company and continuous enhancement of productivity, learning and skill sets of the employees remains the prime focus of the company.

The total strength of the Human Assets of the Company was 2388 on 31.03.2025.

10. Significant changes in key financial ratios along with explanations:

Key Financial Ratios (Standalone) for the Financial Year ended 31.03.2025 are provided here below:

Particulars	Units	FY 24-25	FY 23-24	Change (%)	Reason
Debtors turnover	Times	15.05	15.96	(6%)
Inventory turnover	Times	6.64	7.07	(6%)
Interest coverage	Times	26.81	40.09	(33%)	a
Current ratio	Times	4.67	4.14	13%
Debt equity ratio	Times	0.01	-	100%	b
Operating profit margin	%	10.31	8.37	23%
Net profit margin	%	7.42	6.11	21%
Return on net worth	%	7.03	5.64	25%	c

a. Interest coverage ratio has decreased by 33% mainly due to higher interest expense compared to previous year.

b. Debt equity ratio is increased due to higher short-term borrowings as on 31.03.2025 compared to previous year.

c. Return on net worth increased by 25% due to increase in net profit by Rs. 100 Crores.

11. Cautionary Statement:

The statements in Management Discussion and Analysis describing the companys objectives, expectations or projections, may be forward looking and it is not unlikely that the actual outcome may differ materially from that expressed, influenced by wide variety of factors affecting the business environment and the companys operations. The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or event.