Published on January 5, 2015

For Gujarat State Fertilizers & Chemicals Ltd (GSFC) the fall in the crude prices has come as a blessing as the prices of Benzene which is a derivative of crude oil have dropped, which is used to make the prime products of the company. However, as two-fifths of the revenues of the company come from the chemicals business, insulate will profit GSFC. In fact in the current fiscal year the company may report better earnings, as in the last fiscal year it had reported a drop of 34% in net profit, due to high fertilizer inventories and pressure on profitability at the chemicals business.

Moreover the recovery of the sales strengthened the position of the fertiliser industries in the market, in addition to it, amid the subsidy payments from the government is also improving and the industry is expected to report better performance.

As per the sources, in order to boost the output of the urea the government might approve only 4-5 proposals, out of which 12 were received from the urea manufacturers to enhance the domestic output by setting up new units and scaling up capacity of existing facilities. According to the researched analyst, the annual domestic demand of urea at present is around 30 million tonnes and at the same time the production of urea is around 22 million tonnes.

According to the researched report, during the first seven months of the fiscal year 2015, overall sales volume of fertilisers had improved by 3% to 29.54 million ton year-on-year. Furthermore, on 26th December, 2014 the shares in Gujarat State Fertilizers and Chemicals had drop by 2.1%.