Gujarat State Fertilizers & Chemicals Ltd Management Discussions

MACRO-ECONOMIC FRAMEWORK STATEMENT 2024-25 Overview of the Economy

In the World economic Outlook (WeO) of April 2025, the International monetary Fund (ImF) projects the global economy to grow at 2.8% in the year 2025 and 3% for the year 2026, reflecting a significant downward revision from the January 2025 WeO update (which forecasted 3.3% for both the years). This downgrade is primarily due to escalating trade tensions, particularly u.S. tariffs at century-high levels, and heightened policy uncertainty. global headline inflation is expected to decline to 4.3% in 2025 and 3.6% in 2026, slower than previously anticipated due to tariff impacts

Economic growth in India

As per the provisional estimates published by the Ministry of Statistics and Programme Implementation (MoSPI), India s real and nominal gDP growth rates are reported at 6.5% and 9.8%, respectively, in Fy 2024-25. RbI expects the same rate to continue in Fy 2025-26.

Despite global economic uncertainties, India maintains steady growth driven by strong domestic demand, easing inflation, robust capital markets, and rising exports. Key indicators include record foreign exchange reserves, a manageable current account deficit, and increasing foreign investment, signaling global confidence in India s resilient and balanced economic expansion across sectors. Performance was primarily driven by strong agricultural and service sector performance on the supply side and a steady increase in consumption and core merchandise and services exports on the demand side. The International monetary Fund, in its recent Article Iv report published in February 2025, has stated that India s prudent macroeconomic policies and reform-driven approach have positioned it as the fastest-growing major economy.

The manufacturing sector faced pressures due to weak global demand and domestic seasonal conditions. Private consumption remained stable, reflecting steady domestic demand. Fiscal discipline and strong external balance supported by a services trade surplus and healthy remittance growth contributed to macroeconomic stability. Together, these factors provided a solid foundation for sustained growth amid external uncertainties. Looking ahead, India s economic prospects for Fy 2025-26 are balanced. Headwinds to growth include elevated geopolitical and trade uncertainties and possible commodity price shocks.

From a gross value Added (gvA) perspective, the economy registered a growth of 6.4% in Fy 2024-25. The agriculture sector recorded a growth rate of 4.4% for Fy 2024-25, improving from 2.7% in the previous financial year. This rebound was supported by record Kharif production, favorable monsoons, and strong contributions from high-value sectors like horticulture, livestock, and fisheries.

The industry sector grew by 5.9% in FY 2024-25, with manufacturing showing a 4.5% growth. Notably, the construction sector is estimated to have achieved a robust growth of 9.4% in FY 2024-25. The service sector expanded by 7.2% in FY 2024-25, driven by Financial, Real Estate & Professional Services at 7.2% and Public Administration, Defence & Other Services at 8.9%. On the expenditure side, Private Final Consumption Expenditure (PFCE) reported a 7.2% growth rate during Fy 2024-25, an increase from 5.6% in the previous fiscal year. gross Fixed Capital Formation (gFCF), a key indicator of investment, recorded a 7.1% growth rate for Fy 2024-25. government Final Consumption expenditure (gFCe) grew by 2.3% in Fy 2024-25.

Retail inflation, as measured by Consumer Price Index (CPI), was 4.6% in fiscal year 2024-25, the lowest since 2018-

19. It highlights the effectiveness of RBI s clear shift toward a pro-growth monetary policy stance successfully balancing economic expansion with price stability.

India s total exports grew by 6.01% to reach record high of Rs 69 lakh crore (uS$ 824.9 billion) in Fy 2024-25, as per RbI data. This growth was largely driven by a surge in services exports, which hit a historic high of uS$ 388 billion, up 13.6%. This strong and consistent growth highlights India s ability to deliver high-quality services to global clients, particularly in IT, consulting, finance, and digital technologies. merchandise exports stood at uS$ 437 billion with a modest 0.08% growth rate in Fy 2024-25. Non-petroleum merchandise exports rose to a record uS$ 374 billion registering a 6.0% increase from the previous year with major contribution from sectors such as machinery, chemicals, electronics, and defense equipment, which are gaining traction in global markets.

Total imports during Fy 2024-25 is estimated at uS$ 915.19 billion registering a growth of 6.85%. merchandise imports during Fy 2024-25 were uS$ 720.24 billion as compared to uS$ 678.21 billion during Fy 2023-24. merchandise trade deficit during Fy 2024-25 was uS$ 282.83 billion as compared to uS$ 241.14 billion during Fy 2023-24.

For the full Fy 2024-25 the current account deficit (CAD) narrowed to uS$ 23.3 billion, or 0.6% of gDP, compared to uS$ 26 billion (0.7% of gDP) in Fy 2023-24. This improvement was primarily due to higher net invisible receipts, driven by strong services exports and remittances.

India recorded total Foreign Direct Investment (FDI) inflows of uS$ 81.04 billion in Fy 2024-25, a 14% year-on-year increase from uS$ 71.3 billion in Fy 2023-24, marking the highest level in the past three years.

India s foreign exchange reserves reached US$ 697.9 billion (as of 20 June 2025), sufficient to cover over 11 months of goods imports, offering a robust buffer against global economic shocks. external debt is moderate at 19.1% of gDP as of march 2025, reflecting a healthy and stable financial position globally.

Outlook

In April 2025, the Reserve Bank of India s Monetary Policy Committee (MPC) reduced the policy repo rate under the liquidity adjustment facility (lAF) by 25 basis points to 6.00%, marking the second consecutive cut to stimulate economic growth amid global trade uncertainties. The outlook for manufacturing is optimistic, with expectations of accelerated growth driven by several key factors. Stable profit margins and improving domestic demand are accelerating this momentum, complemented by a gradual recovery observed in recent quarterly results. Additionally, resilient corporate balance sheets and emerging signs of a private capital expenditure cycle are providing further support, indicating a robust foundation for sustained expansion. The services sector is also projected to maintain its strong performance.

This growth is propelled by robust urban consumption and sustained business confidence, underscoring the sector s resilience and capacity to thrive in the current economic environment. Despite the upbeat projections, challenges loom on the horizon. global trade uncertainties and potential inflationary pressures could disrupt this growth trajectory, necessitating vigilance as the financial year progresses.

Agriculture

The agricultural and allied activities contributes approximately 16% of GDP and is the bedrock of the nation s economy.

The budget for Department of Agriculture and Farmers Welfare increased to Rs 21,933.50 crore in 2013-14 and further advanced to Rs 1,22,528.77 crore in FY 2024-25, reflecting the Government s commitment to agricultural development.

The total Kharif food grain production is estimated at a record 1,680.66 lakh metric tonnes (lmT) in Fy 2024-25, higher by approximately 7.9% from Fy 2023-24.

Government Schemes government of India is implementing various schemes/programmes for the welfare of farmers, by increasing production, remunerative returns and income support. The details are given below:

National Food Security and Nutrition Mission (NFSNM) aims to increase the production of key crops like rice, wheat, pulses, and coarse cereals through area expansion and improved productivity, while also focusing on restoring soil fertility and enhancing farm-level incomes.

The Rashtriya Krishi Vikas Yojana (RKVY) focuses on making farming economically viable by supporting pre and post-harvest infrastructure, with sub-components such as Per Drop more Crop and Crop Diversification Programme.

National Mission on Natural Farming (NMNF) aims at promoting natural farming practices for providing safe and nutritious food for all. The mission is designed to support farmers to reduce input cost of cultivation and dependency to externally purchased inputs.

National Bee Keeping and Honey Mission (NBHM) is a government initiative aimed at promoting and developing beekeeping and honey production in India. It encompasses various programs and strategies to support beekeepers and boost honey production .

Per Drop More Crop (PDMC) is a component of the Pradhan mantri Krishi Sinchayee yojana (PmKSy) aimed at enhancing water use efficiency in agriculture by promoting micro-irrigation techniques like drip and sprinkler irrigation.

Soil Health & Fertility (SH&F) refers to the ability of soil to support plant growth and sustain agricultural productivity. It encompasses both the physical and chemical properties of the soil, as well as its biological activity.

The National Mission on Edible Oil Palm (NMEO-OP ) seeks to make India self-reliant in edible oils, particularly in the North-eastern States and A&N Islands, aiming to expand oil palm plantations over the next five years.

Sub-Mission on Agriculture Extension (SMAE) is a scheme to support State extension programmes for extension reforms a component of Centrally Sponsored Scheme Sub-mission on Agriculture extension under Krishonnati yojana is under implementation in 684 districts of 29 states and 3 union Territories of the country.

Sub-Mission on Seed and Planting Material (SMSP ) to produce and supply quality seeds to farmers to enhance production and productivity in the country through various components namely Seed village programme, establishment of seed processing-cum-seed storage godowns at Gram Panchayat level, National Seed Reserve, boosting seed production in private sector and strengthening of quality control infrastructure facilities.

Pradhan Mantri Kisan Samman Nidhi (PM KISAN) provides financial assistance to landholding farmer families across the country, offering direct payments into their bank accounts to support agricultural activities.

Pradhan Mantri Fasal Bima Yojana (PMFBY) offers comprehensive crop insurance to protect farmers against natural risks, with significant enrollment and fund allocation in recent years.

Pradhan Mantri Kisan Maan Dhan Yojana (PM-KMY) ensures pension security for vulnerable farmer families, with contributions from both farmers and the Central government.

Kisan Credit Card (KCC) scheme meets the financial requirements of farmers at various stages of farming. The scheme aims at providing adequate and timely credit support from the banking system under a single window with flexible and simplified procedure to the farmers for their cultivation and other needs.

The Agriculture Infrastructure Fund (AIF) aims to improve post-harvest management infrastructure and community farming assets through medium to long-term debt financing.

The promotion of Farmer Producer Organizations (FPOs ) aims to empower farmers through collective action, with thousands of FPOs registered and supported financially.

The Namo Drone Didi scheme will provide drones to Women Self Help groups (SHgs) to offer rental services to farmers for agricultural purposes, such as the application of fertilizers and pesticides.

Agricultural Technology Management Agency (ATMA) supports decentralized extension services, providing farmers with the latest technologies and practices through various activities, benefiting millions of farmers nationwide.

Digital Agriculture Mission (DAM) is a government initiative in India aimed at transforming the agricultural sector through digital technologies and data-driven solutions.

Interim Union Budget 2025 on Agriculture Sector

The Agriculture Sector has been termed as the 1 st Engine of India s Development in the Budget.

The union budget for 2025-26 was presented by the ministry of Finance on 1 st February, 2025. In the Fy 2025-26, Rs 1,37,757 crore have been allocated to the ministry (2.7% of the union budget).

Highlights

GOI will launch a 6-year " Mission for Aatmanirbharta in Pulses " with special focus on Tur, Urad and Masoor.

Central agencies (NAFeD and NCCF) will be ready to procure these 3 pulses, as much as offered, during the next 4 years from farmers.

PM Dhan Dhanya Krishi Yojana, a new initiative aimed at identifying 100 districts for agricultural advancement, thereby ensuring that targeted resources and technologies are provided to boost productivity in these areas.

A Makhana (foxnut) Board will be established in Bihar aimed at boosting production, processing, value addition, and marketing of makhana, while supporting farmers through Farmer Producer Organizations (FPOs).The board has been allocated Rs 100 crore for the Fy 2025-26.

A comprehensive programme for vegetables and fruits will be launched in partnership with states to promote production, efficient supplies, processing, and remunerative prices for farmers. The mission has been allocated Rs 500 crore for the Fy 2025-26.

The loan limit under the Modified Interest Subvention Scheme to be enhanced from Rs 3 lakh to Rs 5 lakh for loans taken through the Kisan Credit Card.

Launch of a new scheme for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs. This will provide term loans up to Rs 2 crore during the next 5 years.

The Union Cabinet, approved the proposal for setting up of a new brownfield Ammonia-Urea Complex at Namrup in Assam, with an estimated total project cost of Rs 10,601.40 crore. The project will have a capacity of producing 12.7 lakh metric Tonnes (lmT) of urea annually and the new complex will be located in the existing premises of brahmaputra valley Fertilizer Corporation limited.

Allocating Rs 20,000 crore to implement private sector driven Research, Development and Innovation initiative.

A 5-year mission announced to facilitate significant improvements in productivity and sustainability of cotton farming and promote extra-long staple cotton varieties.

The Union Cabinet approved the Revised National Program for Dairy Development (NPDD) with an additional budget of Rs 1,000 crore.

Minimum support price (MSP)

The government of India fixed minimum Support Price (mSP) for 22 mandated agricultural crops on the basis of the recommendations of the Commission for Agricultural Costs & Prices (CACP), views of State governments and Central ministries/Departments. i. mSP for Paddy (common) has increased to Rs 2,300 per quintal in the Fy 2024-25 from Rs 2,183 per quintal in the Fy 2023-24. ii. mSP for Wheat has increased to Rs 2,425 per quintal in the Fy 2024-25 from Rs 2,275 per quintal in the Fy 2023-24. iii. mSP for Cotton (medium Staple) has increased to Rs 7,121 per quintal in the Fy 2024-25 from Rs 6,620 per quintal in the Fy 2023-24. iv. mSP for groundnut (in shell) has increased to Rs 6,783 per quintal in the Fy 2024-25 from Rs 6,377 per quintal in the Fy 2023-24. v. mSP for Soyabeen (yellow) has increased to Rs 4,892 per quintal in the Fy 2024-25 from Rs 4,600 per quintal in the Fy 2023-24.

Food grain Production

Total food grain production for the agricultural, during the Fy 2024-25 touched a new high of 3,539.59 lakh metric tonnes (lmT), registering approximately 6.5% increase from the Fy 2023-24, according to the third advance estimates. This was largely driven by record harvests of rice, wheat, and maize.

Industry

The combined Index of eight Core Industries (ICI) increased by 3.8% (provisional) in march 2025, as compared to the corresponding period in 2024. The ICI measures the combined and individual performance of production of eight core industries viz. Coal, Crude Oil, Natural gas, Refinery Products, Fertilizers, Steel, Cement and electricity. The eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production.

This growth in ICI was supported by increased production in six key sectors: Cement, Fertilizers, Steel, electricity, Coal, and Refinery Products. However, output declined in the Crude Oil and Natural gas sectors during the same period. The summary of the Index of eight Core Industries is given below:

I. Coal - Coal production (weightage: 10.33%) increased by 1.6% in march, 2025 as compared to march, 2024. For the full financial year 2024-25 (April to march), coal production increased by 5.1% compared to the same period in the previous year.

II. Crude Oil - Crude Oil production (weightage: 8.98%) declined by 1.9% in march, 2025 as compared to march, 2024. The cumulative index for the fiscal year showed a 2.2% decline.

III. Natural Gas - Natural gas production (weightage: 6.88%) declined by 12.7% in march, 2025 as compared to march, 2024. Its cumulative index declined by 1.2% during the Fy 2024-25 as compared to the previous year.

IV. Petroleum Refinery Products - Petroleum Refinery production (weightage: 28.04%) increased by 0.2% in march, 2025 as compared to march, 2024. Its cumulative index increased by 2.8% during the Fy 2024-25 as compared to the previous year.

V. Fertilizers - Fertilizer production (weightage: 2.63%) increased by 8.8% in march, 2025 as compared to march, 2024. Its cumulative index increased by 2.9% during the Fy 2024-25 as compared to the previous year.

VI. Steel - Steel production (weightage: 17.92%) increased by 7.1% in march, 2025 as compared to march, 2024. Its cumulative index increased by 6.7% during the Fy 2024-25 as compared to the previous year.

VII. Cement - Cement production (weightage: 5.37%) increased by 11.6% in march, 2025 as compared to march, 2024. Its cumulative index increased by 6.3% during the Fy 2024-25 as compared to the previous year.

VIII. Electricity - electricity generation (weightage: 19.85%) increased by 6.2% in march, 2025 as compared to march, 2024. Its cumulative index increased by 5.1% during the Fy 2024-25 as compared to the previous year.

Fertilizer Market Scenario Monsoon & Agriculture Situation

Performance of south west monsoon remained normal with an overall surplus of 8% over long Period Average (lPA). In terms of distribution, out of 36 meteorological subdivisions, 89% of the area in the country received normal to excess rains. Rainfall over core rain-fed regions in the country received rains of 122% of lPA. However, states such as Punjab (-28%) and bihar (-19%) received deficit rains.

gujarat, Rajasthan, maharashtra, uttar Pradesh and Andhra Pradesh experienced extended monsoon in latter half of the season, leading to flood-like situation in several areas and impacted standing kharif Crops. Overall, south west monsoon helped to charge soil moisture and reservoir levels, promising for a bumper Rabi season.

Favorable mSP declared by goI for kharif and rabi crops to the tune of 6-10%, motivated farmers for higher plantation during the year. Overall, sowing of kharif & rabi crops registered 1,770 lakh Hectare in acreage, a jump of 2% over normal sown area. Individually, crops such as sugarcane, oil seeds, coarse cereals, wheat and paddy registered significant growth in the sowing area across the country. In the state of gujarat acreage of soybean, cumin, tobacco, potato, groundnut and wheat registered substantial jump during the year. Acreage of cotton decline drastically, both at National level and at gujarat. As per the third advance estimates for Fy 2024-25, country is likely to witness record food grain production of 353.96 million mT.

With prediction of normal monsoon, year had started with high hopes of buoyant demand for agri-inputs. On account of consistent high prices of imported fertilizers like DAP and raw materials like phosphoric acid, production and imports both were impacted in the latter half of financial year and as a result opening inventory as well as pipeline stocks of DAP had dried up. geo-political tension across the global and restricted exports of fertilizers followed by China increased the plight for Indian fertilizer industry.

During the year, the industry faced challenges in supplying DAP in sufficient quantum on account of price cap and fixed NbS subsidy, which made DAP non-remunerative for both producers and importers. under the adverse situation, fertilizer companies balanced their product mix by supplying NPK fertilizers in higher quantum to offset shortfall in DAP supplies.

Addressing concern of Industry, DoF provided ad-hoc subsidy on DAP under a special package and price compensation on imports. However, import price of DAP continued its upward trajectory consistently reaching highs of uSD 640 PmT during its peak demand in Rabi, wiping out any reasonable margins and industry was back to square one. During the year, NPK fertilizers was heavily promoted as an alternative to DAP, which was well accepted by all stake holders. Import prices of phosphoric acid remained high throughout the year, squeezing wafer-thin margins of domestic P&K producers. Prices of ammonia remained range bound, whereas Sulphur experienced a spurt in its price during the final months of financial year. On account of rising costs, fertilizer industry was constrained to increase prices of NPK fertilizer to support viability during the fag end of the financial year.

Throughout the period of peak time demand, DoF was utmost vigilant to ensure equitable distribution of fertilizers across the country to avoid any shortage. Overall, even under challenging situation, country could sail smoothly in terms of ensuring adequate availability of fertilizers to the farmers at reasonable prices, to support agriculture.

Performance of Fertilizer Industry

During the year, fertilizer production in the country grew by 3% supported by NPK and SSP fertilizer segment. Production of urea fertilizer in the country decreased by around 2% to 306 lmT during the year. On account of non-remunerative cost, domestic DAP output dropped significantly to 38 lmT with reduction of 12% on year-over-year basis. Capitalizing on lower DAP inventory, NPK producers ramped up their production by 19% on year-over-year to 113 lmT, while production of SSP also rose by 18% on year-over-year basis.

Imports of fertilizers declined by 9% during the year to 160 lmT. In order to reduce dependence on imported urea, DoF curtailed its imports by 20% to 56 lmT. Imports of DAP suffered by 18% to 46 lmT on year-over-year basis due viability constraints faced by the industry. Consequently, import of NPK rose to the tune of 23 lmT up by 2%. Import price of mOP reduced during the year which supported higher consumption prompting increased imports by 23%.

Overall, business environment for the fertilizer industry remained quite conducive. Sales of fertilizers to farmers rose by 9% to record 694 lmT. Individually, sales of urea jumped by 8%, NPKs by 29%, mOP by 34% & SSP by 8%, whereas consumption of DAP dropped by 14%.

Business Performance of GSFC - Fertilizers

In-spite of several challenges faced by the Company in terms of availability of raw material and high import prices of fertilizers, the Company registered fertilizer sales of 19.88 lmT, exhibiting a growth of 4% on year-over-year basis. Improved supplies of fertilizers mainly through baroda and Sikka units contributed for achieving higher volumes. Individually, sales of Ammonium Sulphate (AS) rose by 29% and Ammonium Phosphate Sulphate (APS) by 95% on year-over-year basis. gSFC introduced a new unique fertilizer in its product basket, NPK 09-24-24 (fortified) consisting of seven nutrients.

Capitalizing on demand of our products, the Company supplied fertilizers to primary and secondary markets also, resulting in increased contribution to total fertilizer sales of the Company, from 49% to 56%.

The team consistently monitored the status of un-cleared PoS stocks across the states and followed on a regular basis to enable receipt of admissible subsidies in time and registered PoS sales to the tune of 20 lmT during the Fy 2024-25, higher by 6% over Fy 2023-24. your Company effectively controlled the physical inventories of fertilizers at plant, port & field warehouses and maintained consistent follow-up with the team as well as the dealers to ensure timely recovery of sales proceeds from the market. marketing of Fertilizers of the Company is also undertaken through its wholly owned subsidiary of the Company, gSFC AgroTech ltd. ("gATl"). gATl was established in the year 2012 with the aim of strengthening agri retail business and at the same time diversify into plant nutrient segment (Non-bulk), which has a growing market potential in India. gATl through its wide spread retail network offering single stop solution to the farmers by providing reliable Agri-products at reasonable prices and promoting extension services either directly or in association with State government. gATl manages 255 retail outlets across the state of gujarat and 14 in Rajasthan in a COCO model. All such outlets are manned by trained agriculture graduates / post graduates. besides having full range of chemical fertilizers gATl outlets are supplying host of new generation agro inputs comprising of bio stimulants, organic fertilizers, bio-fertilizers, micronutrients, soil conditioners, liquid fertilizers, agro-chemicals, improved seeds etc., which have a growing market potential. gATl is committed to providing an assured supply of a comprehensive range of agri-inputs of bulk & non-bulk nature to our customers. besides supplying fertilizers & other non-bulk products manufactured/procured by gSFC, they have collaborated with various leading agri-input companies such as National Seed Corporation, Coromandel International, Indian Potash limited, Hindalco, gNFC, IFFCO, CFCl, mahadhan Agri-Tech ltd etc. to ensure the all-round availability of multi brand products at their retail outlets. gATl network provides a solid platform to maintain last-mile connectivity with the farmers, facilitate keeping brand visibility in the field, a faster mode of DbT compliance and thereby subsidy realization, new product launch etc.

Product innovation is yet another endeavor at gATl. Keeping in view the best interest of the farmer, soil and environment, the company is continuously involved in development and launch of newer products and variants.

With a commitment to serve the farmers most effectively, gATl is in constant touch with the latest technology and innovations in the field of agriculture. State-of-the-art Tissue Culture lab which is certified by DbT (Department of biotechnology, government of India) and has already developed tissue culture protocols for over 10 varieties of fruits, flowers and commercial crops. gATl is also providing a package of agronomical services to the micro Irrigation Company of government of gujarat, m/s ggRC ltd. gATl has also established itself as a trusted implementation partner with various departments of government of gujarat for its farmer welfare schemes launched from time to time.

Business Performance of GSFC - Industrial Products

The Company has commenced production of Hydroxylamine Sulphate Crystal from its new plant having rated capacity of 20 mTPD during second half of Fy 2024-25. This increased capacity has helped company to gain a larger market share by substituting imports in the last quarter of Fy 2024-25 and the Company intends to maintain its position as the key supplier. The Company has also planned capacity addition in Phosphoric Acid & Sulphuric Acid plants at Sikka unit which are progressing as per schedule. The Company is targeting to set up chemical complex at Dahej location for manufacturing various products to import substitutes for future growth in chemical segment.

The sales of Industrial products have been impacted during Fy 2024-25 in terms of value as the international prices decreased by 10% on a year-over-year basis for melamine, 4% for Caprolactam, and 5% for Nylon 6 chips. However, owing to its concentrated strategy and providing a good product mix, the segment was able to reach its ever highest sales volume for Technical Grade Urea and HX Crystal. The Industrial Products segment s margin remained under pressure during Fy 2024-25 due to pressure on international prices of chemicals primarily due to overcapacity in China and global economic slowdown, which had a negative influence on its profitability. uS tariffs on Chinese chemicals may further trigger dumping, thus creating pressure on India s chemical sector.

RAW MATERIAL PRICES

The international prices of raw materials increased during the Fy 2024-25 as compared to the Fy 2023-24. during Fy 2023-24 went

The average CFR prices of Phosphoric Acid (PA - P 2 O 5 ) which was uSD 947 per ton P 2 O 5 during Fy 2024-25. As on 31/03/2025, the price of PA was uSD 1,055 per ton up to uSD 1,003 (6%) per ton of P 2 O 5 of P 2 O 5 .

The average prices of Ammonia increased during the Fy 2024-25 as compared to the Fy 2023-24. The average CFR prices of Ammonia during the Fy 2023-24 was uSD 372. It increased to uSD 394 (6%) per ton during the Fy 2024-25. As on 31 st m arch, 2025, the price of Ammonia was uSD 332 per ton.

The average CFR price of Rock Phosphate, which is mainly derived from price of Phosphoric Acid, decreased marginally in the Fy 2024-25 as compared to the Fy 2023-24. The average CFR price of Rock Phosphate during the Fy 2023-24 was uSD 150 per ton. It decreased to uSD 147.50 (-2%) per ton during the Fy 2024-25. As on 31 st march, 2025, the price of Rock Phosphate was uSD 150 per ton.

The average CFR price of Sulphur increased during the Fy 2024-25 as compared to th Fy 2023-24. The average CFR price of Sulphur during the Fy 2023-24 was uSD 110.74 per ton. It went up to uSD 142.48 (29%) per ton during the Fy 2024-25. As on 31 st m arch, 2025, the price of Sulphur was uSD 196.13 per ton.

The price of benzene increased during the Fy 2024-25 as compared to the Fy 2023-24. The average CFR price of benzene during the Fy 2023-24 was uSD 947.20 per ton, which increased to uSD 1001.77 (6%) per ton during the Fy 2024-25. As on 31 st m arch, 2025, the price of benzene was uSD 939.51 per ton.

Average price of Raw Material products ($ / MT)

Product	2023-24	2024-25	% Increase/ Decrease	Prices as on 31/03/2025
Phos. Acid (C & F), P2O5	947	1,003	6%	1,055
Ammonia (C & F)	372	394	6%	332
Rock Phosphate (C & F)	150	147.50	-2%	150
Sulphur (C & F)	110.74	142.48	29%	196.13
benzene (C & F)	947.20	1,001.47	6%	939.51

FINANCIAL PERFORMANCE OF THE COMPANY DURING FY 2024-25

Particulars	Units	2024-25	2023-24	Change	Change in %	Reason For Change
Trade Receivables	Times	10.82	10.88	-0.06	-1
Turnover
Inventory Turnover	Times	21.41	16.69	4.72	28	Inventory turnover ratio improved due to higher sales and improved inventory management.
Interest Coverage Ratio	Times	163.00	234.73	-71.73	-31	Interest coverage fell due to minor increase in finance costs.
Current Ratio	Times	4.36	4.47	-0.11	-2
Debt equity Ratio	Times	-	-	-	-
Operating Profit margin*	%	9.99	9.61	0.38	4
Net Profit margin	%	6.08	5.87	0.21	4
Return on Net Worth	%	4.66	4.27	0.39
(ROe)

*Including Other Income

I NTERNAL CONTROL SYSTEMS AND THEIR ADEqUACY

There exists a robust and comprehensive system of internal controls in place. The internal auditors of the Company comprehensively carry out their audits and their observations/ audit queries are being discussed and debated at length by the Finance-cum-Audit Committee. The Finance-cum-Audit Committee of the Company also reviews the follow-up actions and seeks explanation for the open items. The internal control system is so designed that a particular transaction gets filtered at different levels so as to ensure that proper recording of such transaction takes place and no unscrupulous elements get into the system. The Company uses the SAP platform where-in the roles, responsibilities and authorities are well defined and no deviation is allowed without management approval.

TEN YEARS PRODUCT PERFORMANCE RECORD

The last 10 years Product-wise performance is given below:

PARTICULARS	Unit	2024-25	2023-24	2022-23	2021-22	2020-21	2019-20	2018-19	2017-18	2016-17	2015-16
PRODUCTION
FERTILIZERS	MT	1647232	1432315	1389458	1461910	1908828	1665824	1733957	1678958	1507911	1491741
Ammonium Sulphate	MT	526295	395235	500246	503100	487250	445630	374720	372330	337370	334030
Ammonium SulphatePhosphate	MT	628940	325980	300380	251330	268730	267140	291940	282360	313860	328430
Di-Ammonium Phosphate	MT	137290	261130	193810	307880	565790	484720	459090	503830	411850	370200
N P K	MT	19430	69600	20550	28870	208730	128120	193150	154220	38340	47650
UREA	MT	333960	377410	371070	362826	370700	332705	405360	361181	406571	411431
CAPROLACTAM	MT	82704	84009	87198	86639	81927	83134	91479	86662	86191	86297
NYLON-6	MT	26015	27291	26794	25623	24455	24296	23887	20215	17421	9885
MELAMINE	MT	42452	43500	47756	52847	38732	29215	14161	15188	14886	15697
ARGON	\u2018 000NM3	3272	3369	3564	3294	3325	3116	3574	3319	3549	3581
SALES
FERTILIZERS*	MT	1661026	1440694	1377337	1504194	1945122	1682171	1598428	1604222	1412044	1434684
Ammonium Sulphate	MT	521346	402892	475917	523891	497430	441335	385952	360555	308214	329778
Ammonium Sulphate Phosphate	MT	637583	327284	279885	264959	299160	249482	293115	262134	299025	290107
Di-Ammonium Phosphate	MT	150548	257859	230822	297765	563510	524410	399309	500999	417820	368874
N P K	MT	19837	69126	20579	46431	214999	141409	184270	130194	35024	46558
UREA	MT	331712	383534	370134	371148	361049	325536	366763	313448	360879	355402
CAPROLACTAM*	MT	56515	59684	57402	60359	58170	58764	65596	63217	63101	66483
NYLON-6	MT	28828	32545	29187	27644	28150	23752	25311	22569	13697	9999
MELAMINE	MT	43103	47448	48487	48452	40173	26234	13953	15298	15341	15096
ARGON	\u2018 000NM3	3268	3389	3545	3292	3349	3099	3563	3317	3546	3599

*excluding captive consumption

RISK MANAGEMENT

Changes in government policy, currency risk, fluctuation in input prices, increase in price of Natural gas, insufficient availability of natural gas and raw material, in the international market, recoveries related to subsidies with retrospective effect, have an impact on Company s profitability. market may experience frequent changes in the price of domestic Phosphatic Fertilizers depending upon the cost of production of the manufacturers. Further, the resistance from farming community has impacted demand. With sharp increase in Ng price, prices of Phosphatic fertilizers would go up. In the current scenario, good and widely distributed rainfall, competitive price of raw materials and timely reimbursement of subsidy by the govt. of India have been the key catalysts for the Company to sustain its operations profitably.

In the above likely scenario, the Company is focusing on the efficiency improvement with higher production levels, efficiencies in raw material procurement, increased availability through imports, reduction in marketing & distribution costs, production of various complex grade fertilizers at Sikka and proper product/ segment strategies to maximize the sales to achieve better contribution from its product basket.

To control the financial risks associated with the Foreign exchange/ Currency rate movements and their impact on raw material prices, the Company has put in place a sophisticated Foreign exchange Risk management System. Further, the Company has an online risk management portal under which each identified risks are categorized, monitored and mitigation procedures are devised and implemented so as to minimize any adverse impact of risks.

RESEARCH AND PROMOTIONAL ACTIVITIES

The Company has a well-established, DSIR approved Research Center set up in 1974 at vadodara complex. A dedicated team of young scientists is diligently engaged in driving innovation and enhancing products, processes, and technologies to align with industry needs and surpass customer expectations. With a diverse range of expertise, the team works on conceptualization of emerging ideas across various sectors, including fertilizers, industrial products, biotechnology, waste utilization, and corrosion & metallurgy. Furthermore, our R&D facilities at the vadodara unit incorporate a demonstration pilot plant, instrumental in validating and optimizing parameters for scaling up novel processes developed at the laboratory level. It also facilitates the manufacturing of new products in small quantities for initial market seeding efforts.

To support marketing-IP initiatives aimed at expanding the customer base for Caprolactam and promoting the mSme sector, R&D team is actively engaged in providing training and hands-on demonstrations for the production of Cast Nylon. Cast Nylon serves as a viable alternative to metal parts in various household and industrial applications. As part of this initiative, the R&D team offers comprehensive guidance to potential manufacturers on the selection of suitable raw materials, manufacturing processes, and appropriate machinery to facilitate the successful adoption of Cast Nylon production. To showcase the complete casting process, a dedicated small-scale Caprolactam casting pilot plant has been established within the R&D facility. The team has also developed Rollers from cast Nylon and put to use in APS plant conveyor belt for performance evaluation.

These efforts have yielded significant success, with four mSme units having already set up their own Cast Nylon production facilities, contributing to the increased sales of Caprolactam. In addition, the R&D team continues to provide technical support for large-shaped casting techniques, incorporating the use of an in-house developed activator. These efforts are further strengthening customer engagement and expanding the market reach of Caprolactam.

The Research and Development (R&D) department plays a pivotal role not only in advancing new product and process development but also in delivering essential expertise & services crucial for the seamless operation of our plants. During the initial startup phase of the AS-Iv plant, the R&D team contributed to address a significant issue related to lump formation in the final product. A comprehensive study was conducted to optimize operational parameters, leading to improved crystal size and a reduction in dust formation.

To ensure the safe operation of the new Hydroxyl Amine Sulfate Crystal plant, an in-depth study was conducted on the factors contributing to decomposition temperature of HX crystal. based on the findings, operating parameters were optimized to minimize the risk of runaway reaction during drying operation, which could otherwise lead to the generation of NOX gases and pose unsafe operating conditions.

The R&D expertise & services encompass a wide spectrum, including heat treatment, welding, repair procedure, import substitution, material selection, erosion and corrosion monitoring. Throughout the year, R&D team conducted 12 Root Cause Failure Analysis (RCFA) investigations and assessed over 160 critical equipment locations to evaluate potential damage and monitor material degradation under high temperature and stress conditions. These efforts have yielded significant direct and indirect benefits for the organization, ranging from enhanced material selection and reduced downtime to improved repair practices and extended service life of equipment.

SAFETY, HEALTH AND ENVIRONMENT

Safety management system is fully operative to maintain overall safety of resources deployed within the organization i.e. plant set-up, raw materials, intermediates, final products and associated manpower deployed within the organization. Plant processes are equipped with mandatory and discipline-wise safety devices to ensure continuous safety in plant operations.

Fully functional safety systems for storage, handling and processing of raw materials, intermediates and products are inherent part of plant set up/organization.

Safety department imparts all relevant safety related training to Company employees and contractual workers on daily basis, especially to those associated with the hazardous processes.

The Company has a safety management system is in place and its functionary integrals viz; safety audit, Hazards Operability , Pre Start up Safety Review , mock drills, Departmental environment, Health Safety Committee meetings, Safety inspections, Safety audits, OnSite emergency Action Plan are fully operative at organization level.

Weekly, Area Specific safety inspection initiative is undertaken to enhance safety culture across the organization. monthly safety reviews by top management on critical safety issues are also conducted.

various Safety competitions like Job safety analysis-2025, Self-awareness safety competition-2025, Safety quiz-2025 were rolled out to enhance safety awareness among employees and contract workers across the organization.

New age safety applications for online safety related task execution are under development. The Company has identified and implemented various safety modules, a few of them are:

Safety Training Module

Accident Register

Man-hour working calculation

Safety Inventory data

Incident Reporting cum Investigation Report

Further, an online Safety work permit system is under trial stage. This encompasses permits to start work, working at heights, confined space entry and electrical isolation permits.

Fully functional factory medical unit and township medical centre with qualified staff are in place to provide medical services to employees and contractual workers on round the clock basis. Routine health check-ups and specialized periodical medical camps are organized for medical benefit of employees. environment Control department is functioning for take care of gaseous, liquid and solid wastes generated during plant processes. gaseous pollutants are treated within plant processes, liquid effluents are treated within complex by effluent Treatment Plants and brings it to normative level for safe release. Solid wastes are disposed of in accordance to gPCb/ CPCb norms.

GSFC s focus on safety is reflected in the following:

Safety management system s audit was carried out in April-2024 as per IS-14489-2018 guideline by third party external safety auditing firm.

GSFC has secured Outstanding Performance and was awarded with Gold 4 Star trophy for Workplace OHSE excellence for our baroda unit vide WSO international awards competition-2024 organized by WSO India on 27 th September 2024, at Chennai.

Environmental audit of GSFC BU complex was carried out as per GPCB guideline during the year-2024.

HUMAN RESOURCES

Shareholders are requested to refer the Board s Report which forms part of the Annual Report.

	Sd/-
	Pankaj Joshi, IAS
Place : vadodara	Chairman
Date : 31 st August, 2025	(DIN: 01532892)