Visit http://indiaer.blogspot.com/ for complete details Gujarat State Fertilizers & Chemicals Limited (GSFC) Q2FY11
Results – Ahead of estimates – First Cut Analysis
GSFC has posted extraordinary results for Q2FY11 led by strong performance
from both the fertiliser and chemical segment
Revenues for Q2FY11 at Rs 13 bn, +37% yoy, were significantly ahead of
estimates of Rs 10.6 bn due to higher than estimated revenues from both fertiliser
and chemical divisions
Fertiliser segment revenues (reflective of the favourable NBS policies) at Rs 9.13
bn (+39% yoy) were above estimates by 24%. Chemical segment revenues too
increased by 14% with revenues of Rs 3.9 bn (+31% yoy)
EBITDA margins for the quarter expanded by 960 bps yoy to 24.4% (ahead of our
estimates of 18.2%)
EBIT margins from the fertiliser segment surprisingly improved by 1060 bps yoy to
19.8% (we estimated 10%) while chemical EBIT margins at 32.6% also exceeded
expectations of 26%
Other Income at Rs 438 mn (our estimates Rs 200 mn) was higher than our
estimates while lower interest at Rs 41 mn (we estimated Rs 100 mn) also
affected APAT positively
Driven by strong revenue growth and sharp expansion in operational margins, the
company reported PAT of Rs 2.07 bn (1.7x yoy) and a subsequent AEPS of Rs
26.0 as against our estimates of Rs 14.1
For H1FY11 the company has reported revenues of Rs 23.7 bn (+13% yoy),
EBITDA of Rs 5.01 bn (+159% yoy) and APAT of Rs 3.16 bn (+204% yoy). It has
reported AEPS of Rs 39.6 versus Rs 13.0 in H1FY10
On account of strong Q2FY11 and H1FY11 results, we are likely to upgrade our
earnings estimates by 50%-60% and subsequently our recommendation on the
stock.
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