G N F C — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

GNFC reported an improved operational income in Q3 FY26, driven by volume growth in both chemical and fertilizer segments, with fertilizer segment losses notably reduced. The company is progressing on its Rs. 2,800 crore CAPEX plan, having spent Rs. 1,000 crores by December 2025, and expects its CCPP project to contribute Rs. 82 crores net inflow upon commissioning by early Q4. While TDI prices are improving, the chemical segment faced broader pricing pressure, and raw material volatility for methanol remains a concern.

Highlights

  • Operational income improved, mainly driven by volumes in chemical as well as fertilizer.

  • Losses in the fertilizer segment have come down.

  • TDI prices are improving since January, with anti-dumping duty extended for another five years.

  • CCPP project expected to commission by end March or early April 2026, generating a net inflow of Rs. 82 crores.

  • Ammonia production is expanding by 50,000 tonnes per annum through a make-up loop.

Concerns

  • Chemical segment faced pricing pressure in most products, except TDI, during Quarter 3.

  • Uncertainty continues regarding methanol prices and availability, which is a main feed into acetic gas.

  • A slight delay in the weak nitric acid project, though it is recoupable.

What they filed

Q1 FY27: revenue up 39.8%, net profit up 275.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,917 1,899 2,055 1,601 1,968 +3%1,996 +5%2,208 +7%2,238 +40%
EBITDA90 132 240 31 185 +106%181 +37%482 +101%393 +1168%
Net profit105 163 211 83 179 +70%150 −8%396 +88%312 +276%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹1,000 Cr
    • Capacity building for fifth boiler at Bharuch ₹480 Cr
    • Capacity building for fifth boiler at Bharuch ₹500 Cr
    • Extra line from DGVCL, GETCO for green power valorization and stability
    • Total value of ongoing projects ₹2,800 Cr
    • Total commitments made for CAPEX ₹2,600 Cr
    • LSTK contract ₹1,100 Cr
    • AN melt with Toyo ₹357 Cr
    • AMUGL (new ammonia loop) ₹330 Cr
    • Coal-based CAPEX (approved) ₹613 Cr
    During the last Board meeting, there are certain capacity-building CAPEX also which are approved. One is the capacity building for the fifth boiler, which is at Bharuch. Expected CAPEX is roughly to the tune of Rs. 480 crores to Rs. 500 crores, current is the estimate. Once we appoint the PMC and detailed exercise is done, we will come to know about the final value of the CAPEX on this. Another is to save on the power cost, there is another CAPEX which is done for the extra line from DGVCL, GETCO, which will enable to valorize green power as well as provide stability to the existing operations. [...] So this is the update on all the projects taken together of Rs. 2,800 crores worth of CAPEX. [...] Around Rs. 1,000 crores. [...] The payments part which you asked on the existing CAPEX is Rs. 1,000 crores. But the actual commitment is already done up to Rs. 2,600 crores. It is like in the nature of giving contracts. Contracts are done, the payments are to the tune of Rs. 1,000 crores. Like we have, let's say, an LSTK contract out of Rs. 1,420 crores, Rs. 1,100 crores, an odd amount is already with an LSTK contractor. Rs. 357 crores is for AN melt with Toyo. Around Rs. 330 crores worth of CAPEX is for AMUGL, which is the new ammonia loop. And for the coal-based, we are going to end a little below Rs. 600 crores of CAPEX. The approved CAPEX is Rs. 613 crores.
  • Liquidity Liquidity disclosed Working capital has been quite under control because of the subsidy flow. The subsidy outstanding as at the quarter is roughly Rs. 302 crores.
    On the balance sheet side, there are no major change, and working capital has been quite under control because of the subsidy flow. The subsidy outstanding as at the quarter is roughly Rs. 302 crores.

Guidance & targets

Project Contribution

  • CCPP Net Inflow Project Contribution · Q4 FY26 · High confidence Rs. 82 crores
    CCPP, which is expected to commission sometime by end March or early April, which is expected to give a net inflow in terms of the contribution. At gross level, it is around Rs. 110 crores. At net level, it is going to generate around Rs. 82 crores, and net of its relevant direct cost.

    — D. V. Parikh

Cost Savings

  • Annual Cost Savings from A.T. Kearney Cost Savings · Annual (post contracting) · Medium confidence Rs. 260-300 crores
    Out of the total value which we spoke, which A.T. Kearney has represented at Board level as well to us, the total is between Rs. 260 crores to Rs. 300 crores.

    — D. V. Parikh

  • Locked-in Savings from Renewable Power Purchase Agreement Cost Savings · Annual · High confidence Rs. 5-7 crores
    The clear locking-in is in respect of the renewable power purchase agreement, which is to the tune of roughly Rs. 5 crores to Rs. 7 crores.

    — D. V. Parikh

Regulatory

  • Fixed Cost Revision Decision Regulatory · June 2026 · Medium confidence Decision by government
    You mentioned that it should be expected by June 2026, so has the exercise completed and it's now only upon the ministry to give the final decision on the same?

    — D. V. Parikh

Capacity

  • Ammonia Production Capacity Expansion Capacity · Ongoing · High confidence 50,000 tonnes per annum
    We are expanding the ammonia production by ammonia make-up loop, which would be to the tune of 50,000 tonnes per annum.

    — Nitin Patel

Raw Material Sourcing

  • Ammonia Purchase from Market Raw Material Sourcing · Ongoing · High confidence 35,000-40,000 tonnes
    with capacity increase around 35,000 to 40,000 tonnes we will have to buy from the market.

    — Nitin Patel

Volume Growth

  • Weak Nitric Acid and Ammonium Nitrate Melt Volume Increase Volume Growth · From 2027 onwards · High confidence Increased volumes
    And from 2027 onwards, the volume increase is already in the public domain for both weak nitric acid and ammonium nitrate melt.

    — D. V. Parikh

Capacity Utilization

  • TDI Full Capacity Utilization Capacity Utilization · Ongoing · High confidence 60,000-67,000 tonnes
    TDI we can operate at full capacity, so that volume will be there.

    — Aatur Shah

What to watch in Q4 FY26

CCPP Commissioning & Net Contribution

Next quarter (Q4 FY26)
Current Expected by end March or early April 2026
Target Commissioned, generating net inflow of Rs. 82 crores

Why it matters

This significant new project is expected to contribute materially to profitability.

CCPP, which is expected to commission sometime by end March or early April, which is expected to give a net inflow in terms of the contribution. At gross level, it is around Rs. 110 crores. At net level, it is going to generate around Rs. 82 crores, and net of its relevant direct cost.

Risks & concerns

  • Methanol price uncertainty and volatility

    medium

    Uncertainty on methanol still continues, affecting its availability and price, which is a main feed into acetic gas.

    Management acknowledged

  • Pricing pressure in chemical products

    medium

    The chemical segment experienced pricing pressure in most products, except TDI, during Quarter 3.

    Management acknowledged

  • Increased competition in nitric acid downstream

    medium

    Several players like Deepak Nitrite and Chambal are expanding or setting up new nitric acid plants, potentially leading to oversupply.

    Analyst not addressed

  • Delay in CCPP and weak nitric acid projects

    low

    CCPP commissioning is slightly delayed to end March/early April, and weak nitric acid has a slight recoupable delay.

    Management acknowledged

Q&A highlights

7 direct
TDI Pricing & Anti-dumping Duty Direct
So all the pricing is done on an import parity basis based on the indexes available to us, because that's the way to keep transparency in the pricing, and that's the way to find questions from any customer. So this is how GNFC operates. It takes its price, calculates the import parity price, and prices its products. At times, it is at a premium. At times, it is at a discount. For exact premium and discount during the quarter, our colleague Mr. Tejash Shah will respond on that. The second question is on the anti-dumping duty. Anti-dumping duty, just yesterday we came to know, is extended for another five years on the TDI. So, anti-dumping duty is also taken into consideration for the purpose of arriving at an import parity.

Clarifies the company's pricing strategy for TDI and the positive impact of the extended anti-dumping duty on realizations.

Asked by Nirav Jimudia

TDI Market Size & Imports Direct
TDI, our market share is around 60%, and the rest is import. If you see the total TDI consumption in foam, it is around 1 lakh tonnes. 10,000 to 15,000 tonnes is going into the system houses, and 1 lakh is the flexible foam that is produced. 60,000 tonnes we are selling in the Indian market. As far as the last year 2024-2025 is concerned, we have Dahej plant shut down for four months. So in 2024-2025, we sold TDI around 50,500 metric tonnes in whole year. At present, we are going ahead, and at present, our sales up to Q3 is 30,000.

Provides crucial market context, GNFC's market share, and historical/current sales volumes for TDI.

Asked by Nirav Jimudia

Impact of Trade Deals (FTA) on TDI Exports Partial
First, we have to see what are the advantages we are getting, because as I mentioned, Indian market is growing at the 10% CAGR, and our total production is 65,000 to 70,000 tonnes. So our production, it will be very easily absorbed in Indian market. Yes, we have to see the geographical changes because, in the international market we have to compete on a global level for the pricing front.

Explores potential for new export markets for TDI, though management emphasizes domestic absorption.

Asked by Nirav Jimudia

Export Tax Rebate Removal Impact (China) on GNFC Products Direct
Our acetic acid is falling under that. So we hope the acetic acid prices will be improved in Indian market.

Identifies acetic acid as a product that could benefit from changes in China's export tax rebate policies, potentially improving domestic prices.

Asked by Nirav Jimudia

Production Numbers for Q3 FY26 Direct
The production of ammonia in Q3 was 175,000 tonnes roughly. And the break-up is around 60% is gas, and rest oil-base. [...] WNA, both plants put together is 77,000 and 41,000 tonnes, one and two, respectively. [...] Sorry, WNA 77,000 and 33,000 tonnes, respectively. And CNA is around 8,400 tonnes, one; 8,500 tonnes, two; 9,600 tonnes, three; and 12,000 tonnes. [...] Yes. Formic acid is 9,300 tonnes and AN melt is 116,000 tonnes roughly. [...] Q3 we produced 16,000 metric tonnes of TDI.

Provides specific volume data for key products, essential for understanding operational performance and modeling.

Asked by Nirav Jimudia

A.T. Kearney Cost Savings Implementation Direct
Okay. A.T. Kearney has initiated its engagement since last October. And so far, they have worked on a few proposals where there are savings, but the savings are going to happen once the negotiation part mainly is completed. There are part savings which have already happened, but unless we sign off those contracts with the suppliers, these savings is going to get reflected only thereafter. Out of the total value which we spoke, which A.T. Kearney has represented at Board level as well to us, the total is between Rs. 260 crores to Rs. 300 crores. Certain parts of that has been locked. The clear locking-in is in respect of the renewable power purchase agreement, which is to the tune of roughly Rs. 5 crores to Rs. 7 crores. And the majority of other savings are under contracting, which are yet to be signed off. So, we will be in a position to definitely say about annual savings once this contracting is signed off.

Details the progress and timeline for realizing significant cost savings from the A.T. Kearney engagement.

Asked by Nirav Jimudia

Fixed Cost Revision Decision Timeline Direct
As far as the industry and company is concerned, there are no further rounds of meetings which are happening. And this is a decision which is within the government, and the respective departments have to take appropriate positions on that.

Clarifies the current status of a regulatory decision that could impact the company's fixed costs.

Asked by Nirav Jimudia

Planned Shutdowns for Q4 FY26 / FY27 Direct
So far as Q4 is concerned, no shutdown is planned. Next major annual shutdown is being planned in 2027, that would be in Q2, somewhere around the financial year.

Provides clarity on upcoming operational maintenance schedules, indicating no major disruptions for the immediate next quarter.

Asked by Nirav Jimudia

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Detailed narrative

Q3 FY26 Business Performance Overview

GNFC's operational income improved in Q3 FY26, driven by increased volumes in both the chemical and fertilizer segments. The fertilizer segment demonstrated stability, with slight improvements in NBS rates and good performance from complex fertilizer and urea volumes, leading to a reduction in segment losses. Conversely, the chemical segment, while achieving better volumes, faced pricing pressure across most products, with TDI being an exception.

CAPEX Progress and New Approvals

The company's total ongoing CAPEX projects amount to Rs. 2,800 crores, with Rs. 1,000 crores already spent as of December 2025. The CCPP project is on track for commissioning by end March or early April 2026, expected to generate a net inflow of Rs. 82 crores. Additionally, the Board approved new CAPEX for a fifth boiler at Bharuch, estimated at Rs. 480-500 crores, aiming to boost efficiency from 71-75% to 83%. An extra line from DGVCL/GETCO was also approved to enhance green power utilization and operational stability.

Cost Optimization Initiatives

GNFC has engaged A.T. Kearney since October to identify and implement cost savings, targeting a total of Rs. 260-300 crores annually. While some initial savings have been realized, the majority are pending the finalization of contracts with suppliers. A concrete saving of Rs. 5-7 crores has been secured through renewable power purchase agreements, with further annual savings expected upon full contract sign-off.

TDI Market Dynamics and Production

GNFC maintains approximately 60% market share in the Indian TDI market, which has a total consumption of about 1 lakh tonnes in foam applications. The company's combined capacity across both plants is 60,000-67,000 tonnes. In Q3 FY26, TDI production was 16,000 metric tonnes, contributing to sales of 30,000 tonnes up to Q3. Management aims to operate at full capacity, and TDI prices have shown an improving trend since January, bolstered by a five-year extension of anti-dumping duties.

Ammonia Capacity Expansion and Sourcing

GNFC is expanding its ammonia production capacity by 50,000 tonnes per annum through an ammonia make-up loop to support downstream projects. Despite this expansion, the company anticipates needing to purchase an additional 35,000-40,000 tonnes of ammonia from the external market to meet its overall requirements.

Raw Material and Pricing Outlook

The company faces ongoing uncertainty and volatility in methanol prices and availability, a critical raw material for acetic gas. However, the removal of export tax rebates by China is expected to positively impact acetic acid prices in the Indian market. TDI prices are also showing an upward trend globally and domestically, supported by the recent extension of anti-dumping duties for five years.

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