Gujarat Narmada Valley Fertilizers and Chemicals Limited (GNFC) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Gujarat Narmada Valley Fertilizers and Chemicals Limited, GNFC, Conference Call for Q4 FY26 Earnings, hosted by Anurag Services LLP on behalf of GNFC Limited. From the management, we have Mr. D.V. Parikh, Executive Director and Chief Financial Officer; Mr. Nitin Patel, Executive Director; Mr. P.K. Purohit, Executive Director; Mr. Rajesh Pillai, Company Secretary and Compliance Officer; and other senior members of the management. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. D.V. Parikh, Executive Director and CFO, GNFC Limited. Thank you, and over to you, Mr. Parikh.

D.V. Parikh:

Thank you, Mr. Anuj, for organizing and Mr. Riju for being moderator.

D.V. Parikh:

On behalf of GNFC, we warmly welcome to all participants on this Q4 and FY26 conference call. The company has shared yesterday the results press release as well as investor presentation. Fair coverage is given on all the aspects, though we'll take up any points of question or observation during the question-and-answer session. For the information of all, the company has completed 50 stable years on 10th of May 2026. On this journey, except for 1 year, the company has been profitable all throughout these years, except 1 year, which is year 2014 and '15. In a competitive world, this is a recognizable record as on its way to stable years of operation, it has provided path of prosperity to various stakeholders. On this occasion, we start with good country level contribution during FY26, especially during Q4 of FY26 where the war emerged, the country had 2 issues before it. One is the availability of diesel exhaust fuel issue. And second is requirement from higher ammonium nitrate. In view of the war, there was disruption in the logistics where the company came forward and supported on this. My colleague, Mr. Patel will cover more on this. Now coming to the operating performance, the quarter 4 performance in terms of chemical volumes has been better, whereas there is some impact of war in case of urea, which is recouped to some extent by utilizing the facility of technical grade urea. On a quarter 4 versus quarter 4 basis, the chemical is down, but the fertilizer has been up. On FY-to-FY basis, the numbers are not comparable in terms of production and sales because Bharuch had the annual turnaround.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 If you talk about the physical performance and chemicals in specific, there are 2 chemicals which have seen the impact in terms of volume. One is acetic acid and second is methanol. There is -in case of acetic acid, we had certain internal calculated issues because of which the volume was capped -- production volume was capped, which did not result into the sales volume, therefore. Whereas in case of methanol, the cost economics did not work out given the very high gas price. Even the oil prices have been hovering high, so we could not use even our oil-based methanol plant. Sales volume more or less has scaled production volume. There is an inverted relationship which is noticed between acetic acid and methanol where acetic acid prices have tapered down, whereas the methanol prices have gone up. So, this inverted relationship has affected to some extent, the cost economics of acetic acid as well. While the overall volumes were capped due to shutdown impact, so is better mainly due to relatively lower input cost, which has been having a substantial impact on a full year basis, whereas on a quarter 4, sequential quarter basis as well as year-onyear basis, there are strong realizations which have happened in case of chemical. In spite of the competitive headwinds, which were particularly noticed in case of aniline TDI, the company not only survived but did better during the year. In case of fertilizer, the revision both in urea of fixed cost as well as energy norms are yet to happen. And this is overdue as the losses are widening in case of Fertilizer segment. Coming to the financial performance, as is apparent, the revenue on a quarter-on-quarter basis improved by 11% on a Y-o-Y basis by 7%. Full year is not comparable, whereas PAT has improved on a full year basis by 35% to INR797 crores, with INR 1,065 crores of PBT. Main reasons driving this profit is the better realization in case of chemicals, mainly in Q4 both sequential Q4 and Y-o-Y Q4, whereas on a full year basis, it is mainly the impact of benign raw material prices, which are in relative terms benign. In terms of whether there are any one-timers of note, there are one-timers of around INR30 crores in Q4 and around INR80 crores on a full year basis. If we compare the full year basis of a previous year, we are higher in terms of onetimer gains by around INR50 crores. So, one-timers were INR30 crores last year, which is INR80 crores this year on a full year basis. Company continues to generate strong operating cash flows as is apparent from the cash flow statement. Considering all this, Board has in general declared a dividend of 210%. This is INR21 per share, which is historically the second highest dividend in its history of 50 years. On the balance sheet front, with internal accruals, it is becoming healthy and ready with capex pipeline accumulating. The new projects identification will have clarity by end of this calendar year for taking it to the investment table-grade decisions. Due to the war in the early -- late February and early March, it has impacted slightly the volume of TDI as well as neem urea. And like I said, the neem urea is compensated with technical grade urea because of the overall facility available. In terms of

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 segment, the improvement is mainly driven by chemicals. The other segment represents mainly the IT division, where there is an improvement in revenue of around 20% and the profit has doubled from INR17 crores to INR35 crores. For the capex, there is an update which we have covered in the investor presentation that we had earlier plan of JV with INEOS. Now we are talking to them about licensing for additional capacity. So that dialogue is on with INEOS. Now I'm handing over the session back to moderator for further interactions with the stakeholders. Thank you very much. Moderator:

Speaker, should we open the line for questions?

D.V. Parikh:

Yes, you may proceed.

Moderator:

The first question comes from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.

Nirav Jimudia:

Congratulations on a very good set of numbers. few questions I have, sir. First is, when we see our raw materials which are very, very critical in terms of our production, which are like methanol, which you have covered in your opening remarks, along with oil, which we procure from the oil marketing companies for our ammonia production as well as benzene and toluene. So how are we placed in terms of the availability of them, especially the oil part which we purchased from the IOCL for our ammonia production. So, if you can share your views here in terms of how we have been in Q4 and how are we in terms of Q1 and Q2 for our availability of raw materials?

D.V. Parikh:

Okay. I'm D.V. Parikh. I will cover this question on behalf of raw materials, although they are better placed. So, if I'm missing anything, I'm requesting my colleague from materials to supplement. So, in case of oil, there is no issue we have faced even after the Hormuz issue came up. So IOCL has been consistently supplying the required materials in terms of oil as a feedstock. As far as toluene and benzene is concerned, our contract, which was there for procurement of toluene, benzene expired sometime end of financial year. And we have got a short-term extension on those contract considering the war situation. However, we are not facing any issue in terms of its availability so far. Although the prices have spiked because of the war situation, we are still not having any issue in terms of availability. Now I hand it over back to our materials team for further comments.

Tejash Shah:

Yes. Good evening. Already, our Executive Director, Mr. D.V. Parikh has appraised that as far as the supplies of oil, benzene, toluene is concerned, we are not facing any issues on front of availability till date. And whatever requirement is there, it is coming on a consistent basis.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Nirav Jimudia:

Correct. And sir, about the methanol part because it is not viable to produce in India given the higher gas prices, how we have been able to secure methanol. And since the Iran war has begun, I believe that there could be an availability issue coming from Iran also. So how we have been able to source effectively the methanol part and for how many months we are covered for FY '27, '28?

D.V. Parikh:

Okay. See, methanol, first of all, you are right. It has gone through a volatility and that has affected the cost economics of acetic acid. So, what the company is doing is it is evaluating whether it is viable to produce acetic acid or source from the market for manufacturing the further downstream called ethyl acetate. So, we are following both. If wherever we get the methanol beyond -- below the viable price, we procure methanol. In case it is not working out, we also keep a channel open for sourcing acetic acid. So, this way, we keep the customer -- we serve the customer demand and also try to optimize the contribution level.

Nirav Jimudia:

Got it, sir. Sir, second, what I could see is that the oil cost for us during the quarter 4 was more or less similar to Q3. In fact, it was slightly lower than what we have incurred for Q3. So if you can help us explain like what is the formula on which IOCL gives us the oil, A, and B, how could we see this cost for oil to us in Q1 or probably Q2? If you can just give the road map of the oil cost to us, that would be very helpful.

D.V. Parikh:

As far as Q4, I'm D.V. Parikh. I will explain this. And thereafter, we hear from materials as well. As far as oil prices for sequential quarter basis is concerned, there is a reduction in the oil prices. Regarding your question, I also tell you about what is the reduction. There is a net reduction of INR 3,000 on a sequential quarter basis on a per metric ton sequential quarter basis. Now coming to the question on how it looks like in Q1 as well as Q2, see, there is a volatility and there is a sharp volatility as compared to March, there was a significant difference in April. However, this keeps on changing and doing a prognosis on that based on how far the war is going to continue and what exactly is going to happen to the straight from where most of the material comes with the Strait of Hormuz is anybody's guess. So, on future, Q1, Q2, we are unable to exactly answer your question because that's a prognosis for the future and hard to make prediction.

Nirav Jimudia:

Got it. But sir, like, let's say, from March to April, how much was the increase A and B, on what formula basis does IOCL give us like it is based on a monthly basis or it is fixed on a quarterly basis? So, what is the formula here?

D.V. Parikh:

Okay. The broad contours of the formula we can give, it has a trailing impact in terms of like monthly, there is a cut-off monthly date of the previous month and thereafter, it considers 30 days. And it has a benchmark index with various elements being added for import duty, etcetera. So this is -- these are the broad contours of the formula with IOCL.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Regarding your question on what exactly has been the increase in April versus March, this is something which is a sensitive information. But still, if Aman can give a broad idea, I request Nirmesh Desai to comment if you can. Management:

If you look at the oil prices prevailing in the month of March and oil prices prevailing in the month of April '26, there was a significant difference or significant rise in the month of April on account of higher indices worldwide.

Nirav Jimudia:

Correct. Got it, sir. Sir, if you can share the production numbers for ammonia, both from oil route and gas route, WNA, CNA, AN Melt, and TDI for FY26?

Nitin Patel:

Ammonia oil route was close to 3 lakh metric ton. Gas route was 360,000. I am Nitin Patel, Executive Director. CNA was 147,000, and WNA, 430,000 approximately and TDI around 57,000.

Nirav Jimudia:

Okay. Sir, AN Melt and Formic Acid?

Nitin Patel:

Formic acid was close to 34,000, and AN Melt was close to 170,000.

Nirav Jimudia:

Okay. Sir, you covered in your opening remarks that there could be an issue with reference to the acetic acid. But let's say, apart from acetic acid, are there any other products where we could see production problems or -- let's say, production difficulties with reference to the availability of raw materials? Or -- also, if you can share that with reference to what we have produced in FY26, is there any product from our product basket where we can still optimize in terms of the production in FY27?

Nitin Patel:

We have closed FY26 with no curtailment of any production. Productions were at peak and at optimized level. Going forward, it all depends on war situation, how quickly it resolves and what is stored in future. It is very difficult to predict as my colleague has explained, Parikh sir.

Nirav Jimudia:

Correct. And sir, out of this 147,000 tons of CNA produced, how much it was sold in the market?

Nitin Patel:

Around 45%.

Nirav Jimudia:

45% was sold in the market. Okay. Correct. And any ammonia was available for sale in the spot market or entirely it was used for our captive production?

Nitin Patel:

Entire ammonia was used for downstream captive production.

Nirav Jimudia:

Okay. And there was no need to purchase any ammonia from the outside market, right?

Nitin Patel:

That's right. In Q4, we haven't...

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Nirav Jimudia:

Correct. Sir, next question is on the aniline part. So when we see our presentation, like India imports substantial volume like to the north of 250,000 tons, and we have been the only player. So just wanted to understand like why over the years, we haven't expanded the capacity. And if you can correlate this with like the A.T. Kearney, which we have hired. So are there any suggestions from them in terms of any expansion for the Aniline part or why we've not been able to increase the capacity of Aniline given benzene is available in abundance in India. So what was stopping us for expanding the capacity of Aniline?

Nitin Patel:

See, first, I will cover the technical part. Then Mr. Tejas will cover the market part, and then Parikh will summarize about Aniline question. So far as Aniline is concerned, the cost of hydrogen is important. Hydrogen is one of the raw material along with CNA and benzene. Benzene, I'm buying hydrogen, I'm producing from the fuel oil. And I have to compete with the Chinese producers who are producing the -- from coal, the required hydrogen. And capacity of scale, I have a limited capacity. Chinese plant have more than 7x or 8x a single location capacity. So scale matters. And there is an import dumping in the market, which I will ask Tejas to cover. And basically, on a stand-alone, we are not viable in aniline. So we are doing the job work, job work of some other companies on a fixed margin basis. Tejas?

Tejash Shah:

I'm Tejash Shah. Executive Director Nitin bhai said, it is right there is huge dumping from China, although there is an antidumping duty, which is minimal from Wanhua, it is $37 and other than Wanhua, it is $121 because Wanhua and all other big players have a huge MDI plant and is an intermediate product in MDI production. So when the MDI market is slightly down, they dump the aniline in Indian market. So it is very difficult to compete with the China market Aniline. So that's why we have not enhanced our capacity because Chinese Aniline is very cheap.

Nirav Jimudia:

Perfect, sir. Perfect. Got it. Sir, next question is on the TGU part. Like you highlighted and you alluded that TGU production was slightly better in Q4. So if you can share here that how much we have produced in Q4 and FY26, A and B? Let's say, as against our rated capacity of 169,000 tons, how much maximum we can produce TGU in a year? And why is TGU so much important from India's point of view? Like are there any substitutes for TGU which can be replaced on? So these are 2 sub points on TGU.

Nitin Patel:

See, I will ask from production point of view, I'm Nitin Patel. Normally, my breakup is that around 20% of the total urea production, I can produce from industrial ammonia, oil-based ammonia as a TGU. Now subsequent to war start-up -- war starting, we immediately increased the TGU production at the cost of neem urea because country wanted TGU. We are the only manufacturer apart from GSFC, which has a small quantum and little inferior quality than us. We have BS6 engines, need diesel exhaust fuel. So entire logistic was on the verge of collapsing and we rose to the occasion. And we simply doubled our TGU production for the month of March. And we are still continuing on that,

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 keeping a little bit deficit on the neem urea compared to the target given by Department of Fertilizers. And this initiative was well appreciated by Ministry of Heavy Industries, Automobile Industry Association of India as well as Department of Fertilizers. So this is all about TGU. In general, the capacity of 169,000 is an average capacity, which I spoke about. It largely depends on shutdown of the urea plant, which we take once every 2 years and also in between interruptions, if any in urea plant. We produced more than 210,000 in FY26. Nirav Jimudia:

Correct. So let's say, 210,000. So let's say, the urea production hypothetically should be or should be 1 million tons so that we can get 20% permissible limit to produce TGU. Is the right way to understand this?

Nitin Patel:

No, my urea reassess capacity is 637,000. And I close by a deficit of around 15,000 to that figure and the rest was TGU.

Nirav Jimudia:

Correct. Got it, sir. Perfect. Sir, next question is on -- let's say, the coal-based boiler, like last time you updated us that it was supposed to start in April. So what is the update there when it is going to start A and B, with the current gap increase between the gas and the coal prices, what is the current estimate in terms of the benefit in rupees per metric ton of savings, which could accrue for the TDI production?

D.V. Parikh:

Okay. I'm D.V. Parikh, I'll answer this question. The coal-based CCPP, as we call it in our presentation was to start sometime in April, but the lump sum turnkey contractor faced certain delays and they have revised the date now for synchronization sometime in the third week of June. And for the performance guarantee test run to make it available on a full steam basis, it is sometime in the third week of August '26. So this is on the likely commissioning of CCPP. Regarding the cost differential, gas prices are going up, so are the prices of coal have also gone up. Our last estimate was to the tune of around INR10 crores to INR12 crores per month, which was the saving potential. So we maintain that the PAT should really accrue once it is up and running given the stated prices of gas and coal.

Nirav Jimudia:

And this should start accruing to us from H2 of FY27, right?

D.V. Parikh:

Yes.

Nirav Jimudia:

Sir, last question before I join back in the queue, any update on the fixed cost revision for urea and revision of energy consumption norms, like you highlighted in your remarks that it has been now a long view. So where are we currently in terms of both these aspects?

D.V. Parikh:

No, there is no particular update in terms of formal communication, okay? Although we keep on approaching department from time to time. But the update to us is energy norms are under approval and the fixed cost revision is still at discussion stage.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Nirav Jimudia:

Okay. And sir, one more clarification, like are our entire product basket, what we produce, the sales happens on a spot basis, like whenever the price changes in the international market, we revise that? Or are there any contracted volumes also?

Tejash Shah:

I'm Tejas Shah. We are doing the variable price contract. Whatever the prices are changes along with the international power plant market that will be effective to the customers, upward or downward.

D.V. Parikh:

A small portion of this, we do it through a very short-term contract as well. And that is what is the policy structure of the company also. But buying large, the contracts extend a month or 3 months at the most.

Nirav Jimudia:

Thank you so much sir for giving me all the details. And wish you all the best. I'll join back in the queue.

Moderator:

Thank you. Next question comes from the line of Rohit Sinha with Sunidhi Securities. Please go ahead.

Rohit Sinha:

Thank you for taking my questions, sir. A couple of questions from my side. One is, I mean, we have seen a price increase in a lot of chemical products recently. So, just wanted to check that how much we have -- in how many products we have taken in the kind of price hike and where we have faced challenges in terms of taking any price hike? And how much of that benefit of increasing price was reflecting in Q4 number and possibly how much we would be expecting in the Q1?

D.V. Parikh:

Okay. I will answer on an overall basis first, except formic acid, everywhere in chemical, there is a positive realization on a sequential quarter basis. And the higher realization, like you said, has contributed both on sequential and Y-o-Y basis to this profitability. As far as individual product pricing is concerned, I will request our marketing colleague, Shri. Tejas bhai Shah to respond.

Tejash Shah:

Yes. As Mr. Dilipkumar Parikh has said, except formic acid, all the -- we are getting -- we got good realization in Q3 compared to Q4.

Rohit Sinha:

Even Q4 compared to Q3?

Tejash Shah:

Yes. Q4 compared to Q3.

Rohit Sinha:

So any -- I mean, broader number, if you can highlight about the percentage where we have seen, like 30%, 40% on an average?

Tejash Shah:

Product to product, but if you see the range, it is from 6% to 28%.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Rohit Sinha:

Okay, okay. And similarly for the fertilizer side, how the price revision we are expecting going forward? Because I guess we haven't seen anything as of now. So probably can we expect fertilizer division to turn positive in coming quarter or it will still remain at the EBITDA level, it will still remain in the similar range?

D.V. Parikh:

In fertilizer, there is an under recovery like we covered. And until the time norms are revised, both for fixed cost and energy, we see almost no chance in case of urea. In case of the complex fertilizer, we do on -- because of this nutrient-based pricing at a contribution level.

Rohit Sinha:

Okay, okay. And just one last question on this capex towards the ammonium nitrate and nitric acid thing. So how that is progressing for us? And how we are seeing the market overall for this ammonium nitrate going forward for FY '27, '28?

D.V. Parikh:

See, both these 3 projects actually, ammonium nitrate, weak nitric acid and ammonia expansion are going on track. There is a slight minor delay in case of weak nitric acid of around 2.5 months. The rest are all on stream. As far as the price prognosis is concerned, I will request marketing to respond on this.

Tejash Shah:

As far as the ammonium nitrate is concerned, CAGR is around 6% to 7%. So slowly all the capacities Chambal, even Deepak Fertilisers and GNFCs are coming up with their plants. Slowly, all the capacity will be absorbed presently around 4 lakh, 4.5 lakh import is there in ammonium nitrate. So based on the domestic capacity increase, there will be no import in the future and domestic production will be absorbed in the market.

Nitin Patel:

And I'm Nitin Patel. If you know the public news recently, Government of India has announced that coal-based chemicals would be a priority. There is a package announced. And Coal India has a very ambitious target for the mining. And for mining, the explosives are required and for explosives, ammonium nitrate will be consumed. So going forward, as Mr. Tejash told, looking to CAGR and ambitious thrust by Government of India for self-sustenance on coal route, we do not expect any issue in absorbing the additional volume produced by us.

Rohit Sinha:

Got it, got it. And sir, if you could help us with the price trend in last 2, 3 months of this ammonium nitrate?

Tejash Shah:

Ammonium nitrate price in the Q4, ammonium nitrate price was increased just because there was an increase in ammonia price, international ammonia price. And presently price is stable, whatever they at the peak level. And we are observing the market. Import is less at present just because of Russia and Ukraine conflict because mostly import is coming from the Russia. So presently, price is good in ammonium nitrate.

D.V. Parikh:

So on a quarter-on-quarter basis, there is a 20% improvement in the ammonium nitrate prices.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Rohit Sinha:

Got it, got it. And that is currently sustaining at higher side?

D.V. Parikh:

Yes.

Rohit Sinha:

Okay, okay. That’s it from my side, sir. Thank you.

Moderator:

Thank you. Next question comes from the line of Aman Kothari with Aequitas Investments. Please go ahead.

Aman Kothari:

Thank you. Congratulations, sir, for the wonderful set of results. Sir, first question that I have is, can you just give us an idea on the chemicals that will see limited operation ability in Q1 because methanol is a challenge that we have been facing. So are we facing difficulties in production of, let's say, acetic acid, methanol and also, I think ethyl acetate is where we use glacial acetic acid. So are these 3 products being affected?

Nitin Patel:

If you remember -- I'm Nitin Patel. If you remember, our CFO has already covered this issue in the opening remarks and in the first question. In Q1, the gas prices are high. So methanol production is not viable. At the same time, we are exploring both the options for our downstream that is at a threshold to buy methanol for captive production of acetic acid or to buy acetic at a threshold price for the captive production of ethyl acetate.

Aman Kothari:

Got it. And sir, currently, as you mentioned, TDI and toluene both have seen price increase. But can you just give us an idea on what the improvement has been in quarter 1 on the spread? Because I think at the end of the year, we were almost at a 3-year high in terms of the spread.

Rajesh Pillai:

Aman, this is Rajesh here, Company Secretary. And I would request all the investors because this con call is for Q4 as well as for FY '25, '26. So I request all the investors to please limit their questions to that quarter because Q1, it's a price-sensitive information, we will not be able to provide such details.

Aman Kothari:

Okay. Sir, this quarter, we have also seen an increase in the loans and advances. So from INR565 crores, we have gone to roughly INR 2,400 crores. So can you just give us an idea on what this increase has been?

D.V. Parikh:

See, this is an interest rate change. When the investment profile changes from one source to another source, this is the difference. So, we also invest on inter corporate deposits, okay, for the surpluses. So this change in amount reflects that as well.

Aman Kothari:

Okay. And it has been done for a strategic purpose?

D.V. Parikh:

See, for the time being till the time our capex cycle is over, we park with the best yield to the extent possible. So these are the decisions which are based on yield base for temporary surpluses.

Aman Kothari:

Got it.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Moderator:

Mr. Kothari, are you with your questions?

Aman Kothari:

No. Just the last question on my side before I join the queue again. Do we have any plans for a buyback currently? Is there anything on the table that we would consider?

Rajesh Pillai:

As of now, we have nothing in the pipeline. So it will be all decided, and we will inform to the investors and the shareholders as and when the situation arises.

Aman Kothari:

Okay. And just the last question, I think there was a policy or news that came out that government is looking to come up with a new urea investment policy. So in that case, if there is a policy that comes out in support of setting up domestic urea manufacturing facilities. Is it something that the management would consider?

D.V. Parikh:

It depends upon what are the details of the policy. So without going to details of the policy, it is premature to comment. And second is we will have to compare it with the other investment opportunities which is available in general. Normally, what happens is this is a regulated kind of business segment. And chemical is more or less an unregulated one. So our experience so far has been, like you see in the segment results also, we make good money in unregulated markets. Unregulated not so governed in terms of caps on profit. At times we lose, at times we gain. But this is how it operates. It does not remain parallelly into losses. So when it comes to fertilizer, we'll have to evaluate the details of the scheme as and when announced.

Aman Kothari:

Got it. Thank you sir I will just join back in the queue.

Moderator:

Thank you. Next question comes from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.

Nirav Jimudia:

Thanks for the opportunity. Sir, you mentioned that there was a onetime income of INR80 crores in FY26. So what was it all about? And how much we have booked in Q4 of FY26 out of this INR80 crores?

D.V. Parikh:

Q4 has INR 30 crores of one timers. When we talk about one timer, basically, it is like sort of insurance receipt which are there. Government of India has settled the freight rates effective '21, '22 until '23, '24. So that income is also part of that. Mainly it comprises of these 2 when we talk about INR30 crores. And when we talk about INR80 crores, like last time it was already INR50 crores. This time, it is INR80 crores. I'm sorry, last time, it was INR38 crores, and this time it is INR80 crores. So there is a net difference of around INR45 crores or so in terms of income, one timer income.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 And again, this represents mainly the insurance receipt and escalation of fertilizer freight rates, urea freight rates. Aside from this, we had onetime income on disposal of catalyst dust of wheat nitric acid plant and some penalty on account of the CCPP delay, which is the power plant delay at Dahej. Nirav Jimudia:

Perfect, sir. Got it. Sir, apart from the raw material issue, which may come or which may not come for our production schedule, are there any planned shutdowns which we are planning for next year?

Nitin Patel:

We have a planned shutdown in April '27.

Nirav Jimudia:

Okay. Perfect. Sir, next question is on the ammonium nitrate. So the production numbers, what you just gave us, is it also includes the by-product AN melt, which we get from ANP production or that is separate, sir?

Nitin Patel:

Yes, yes, it's a total.

Nirav Jimudia:

Okay. And how much generally we get by-product out of ANP fertilizer?

Nitin Patel:

My direct synthesis is 50,000 and rest is by-product.

Nirav Jimudia:

Okay. Got it. Perfect. Sir, next question is on, when we see on a quarter-to-quarter basis, like there was INR300 crores improvement in the EBITDA between Q3 to Q4. So if you can just highlight which of the products have contributed to this improved performance in order of their contribution? That would be very helpful.

D.V. Parikh:

So you want the major product which contributed to this performance?

Nirav Jimudia:

Correct. Improved performance.

D.V. Parikh:

Okay. So one is TDI. Second is ammonium nitrate, and third is technical grade urea. So these are the products which have contributed to the improved performance during Q4 on a sequential quarter basis.

Nirav Jimudia:

Got it. Perfect. And sir, last question from my side. Last time, you have explained us about some cost-saving measures, which could accrue to us in FY27 based on AT Kearney's recommendation. So now with 3 months or 4 months passing through between our last conversation, so are there any further measures being directed or given by, or suggestions given by AT Kearney, which now could be safely implemented by us or there could be some further cost saving initiatives? Anything which you can share?

D.V. Parikh:

Okay. See, when they were appointed, there was a saving number, which we discussed. Overall, there is some delay in the overall realization as well as indication from their side, which they also acknowledge. As far as approval is concerned, there are certain proposals which are made

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 and which are in the process of approval. Once that is done, the number would be woven, but then it will start gradually shipping into '26, '27. As far as last year is concerned, there is some saving on account of oil, which has happened due to their effort. So all the numbers should be reconciled one day with them when the assignment is about to be over. So let all the initiatives as of now take place and different initiatives will give different kinds of savings with a different intensity. So we will reconcile at the end of the assignment. Though some saving has already accrued. And that saving to some extent has arisen in case of predominantly the oil. Nirav Jimudia:

Perfect, sir. Last bit from my side, like slightly on a technical part. Sir, you explained us about the aniline part like hydrogen as well as CNA and benzene are the key raw materials for aniline. So just wanted to understand how is, so let's say, from my understanding point of view, like first nitrobenzene is produced and then the aniline is produced when we go through the synthesis process. And what I believe is that even nitrobenzene, there is good demand from even the rubber chemicals and other industries. So if you can just explain me the technical part in terms of where the nitrobenzene comes in this production process and how much nitrobenzene we produce on an annual basis?

Nitin Patel:

Nitrobenzene rightly you explained, it is an intermediate and it is reacted with hydrogen to produce the aniline. And CNA plus benzene are used to synthesize the nitrobenzene. Nitrobenzene has a limited market. Bulk goes for captive aniline production. I'll ask Tejash to say a few words about the nitrobenzene market.

Tejash Shah:

Yes, you are right. Nitrobenzene is used in rubber chemicals. We are supplying to the rubber chemical manufacturers. But most of the nitrobenzene goes to the aniline production. We have a market, and we are selling nitrobenzene as an intermediate product.

Nitin Patel:

Close to 13% is going for sale and rest is going for captive.

Nirav Jimudia:

Got it. Thank you so much sir and wish you all the best.

Moderator:

Next question comes from the line of AM Lodha with Sanmati.

AM Lodha:

Mr. Parikh. Sir, my question is related to plant capacity utilization. The overall capacity is on the plant of TDI, acetic acid, and all other plants. The company is running at what capacity?

Management:

See, plants are running at a peak capacity. Capacity utilization in case of acetic and most of the plants is above 100%. So far as TDI is concerned, it is close to 80%. Worldwide, the operating factor for TDI is close to 80% because of the complexity and challenges in operation and maintenance of the plant and nature of the material which is to be

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 handled. So, we are close to global benchmark even for TDI in spite of many issues which we are facing at times. AM Lodha:

Congratulations, sir. TDI is our bread and butter. And if we are operating plant at 80%, the TDI prices are remunerative to the company, sir?

D.V. Parikh:

In last quarter, yes, we had good prices -- remunerative prices. Current quarter also, the prices are -- have softened down, but still better.

AM Lodha:

Okay, sir. Another thing, sir, second question, the onetime INR 80 crores additional income or extraordinary income, which is pertaining to us, sir?

D.V. Parikh:

I'll explain again. First of all, the net difference on a year-to-year basis, absolute amount is INR 80 crores, but the net difference is INR 50 crores because last year anyway around INR 38 crores were there. Now coming to the factors which have contributed to one-timers, like I explained, we had an insurance receipt of around INR 28 crores. We have settled escalation freight claim of INR15 crores. And we also had some realization on account of catalyst dust of weak nitric acid plant. And the fourth one is related to some penalty recovery for the delay in the project of CCPP.

AM Lodha:

Okay, sir. My last question, sir, INR 2,400 crores is shown in advances sales, which I could gather from the conversation that it is inter corporate loans. It is given to PSU companies or the private sector companies, sir?

D.V. Parikh:

PSU.

AM Lodha:

PSU. What is the interest rate accruing to the company, sir?

D.V. Parikh:

Around 7.25%.

AM Lodha:

Inter corporate is 7.25%?

D.V. Parikh:

Yes.

AM Lodha:

Nowhere in the world, inter corporate loans are being given at 7%. Is it the Gujarat State Financial Corporation?

D.V. Parikh:

Yes.

AM Lodha:

Okay, it's all right, sir. Because the amount is secured, then it's all right, sir. I thought -- we thought it is private sector, it is inter corporate loans ranging...

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 D.V. Parikh:

No, no. Our company's governance doesn't allow loan to private sector like that. It is only our own arm where we can draw for the real capex needs in time to come. So, you are free to ask any other question, sir?

AM Lodha:

Only last question, sir. The acetic acid prices. Acetic prices and ethyl acetate prices, they are correlated. So, I just wanted the acid, what is the trend of the acetic acid prices and trend of ethyl acetate?

Tejas Shah:

Presently, as far as the international trend is concerned, the acetic acid as well as ethyl acetate trends are in reducing trend, both the prices. International prices are both -- international prices are reducing trend.

D.V. Parikh:

I will cover for a full year basis. Practically, if you see the full year last year and this year, practically, there is no major change. We had a realization where it has not changed even by INR1,000 in both the products taken together. But if you see quarter-to-quarter because of this kind of disruptions, there is an upheaval in the prices. But on a full year basis, there is less than INR1,000 per metric ton difference.

Moderator:

Next question comes from the line of Rohit Sinha with Sunidhi Securities.

Rohit Sinha:

Yes. Just one question, sir. On the capex side, how much the overall capex would be there for FY27 and FY28?

D.V. Parikh:

The capex for FY27 is going to be around INR 2,800 crores.

Rohit Sinha:

And for FY28, if you can share?

D.V. Parikh:

FY28, we would be in a position to tell in quarters coming because as we finalize the rest of the capex and come up in terms of its schedule, we will come to know better.

Rohit Sinha:

Okay. Got it. And this ammonium nitrate – nitric acid and ammonia plant will be finally coming up by FY28 at least, I guess.

D.V. Parikh:

Yes, next year, these are going to come up. All the three-ammonia expansion, the nitric acid, ammonium nitrate melt, all are going to come up by next year. And this year, the CCPP is going to be operational by quarter 2.

Moderator:

Ladies and gentlemen, as there are no further questions, we have reached the end of questionand-answer session. I now hand the conference over to Mr. D.V. Parikh, Executive Director and CFO, GNFC Limited for closing comments.

D.V. Parikh:

Thank you very much for attending the call to all the participants. And on behalf of GNFC, we welcome further questions, if any, through our Investor Services cell. And please stay in touch. Thank you very much. With this, I hand over the call to our Company Secretary.

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Gujarat Narmada Valley Fertilizers and Chemicals Limited May 19, 2026 Rajesh Pillai:

Thank you, sir. I, on behalf of the participants and the senior members of the company, thank all the investors for joining this call. And I express my sincere gratitude to Mr. Renju as well as Mr. Anuj of Anurag Services for conducting this call.

D.V. Parikh:

Thank you.

Rajesh Pillai:

Thank you.

Moderator:

Thank you. On behalf of GNFC Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

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