GNFC Q2 FY27: consol. PAT ₹194 Cr (+8% YoY) as margins compress on 41% revenue growth

GNFC's consolidated PAT came in at ₹194 Cr for Q2 FY27, up 8.4% YoY from ₹179 Cr but down 37.8% QoQ from Q1 FY27's ₹312 Cr, on revenue of ₹2,773 Cr (+40.9% YoY, +23.9% QoQ). Standalone PAT was ₹185 Cr (EPS ₹12.59); consolidated EPS was ₹13.20, lifted by a ₹9 Cr share of profit from associate Gujarat Green Revolution Company. No consensus/street estimates for this specific quarter turned up in search, and GNFC's prior concall commentary was capex/project guidance rather than P&L guidance, so the read here leans on management's own QoQ/YoY narrative and the underlying margin trend. The headline growth masks a sharp margin squeeze: operating margin fell to 7.10% from 17.56% in Q1 FY27 and from 9.40% a year ago, while net margin fell to 6.69% from 13.34% QoQ and 8.54% YoY. The Chemicals segment — the larger profit pool — saw PBT drop to ₹177 Cr from ₹425 Cr QoQ on lower realisations and higher fixed costs despite higher volumes, though it improved marginally YoY (₹158 Cr → ₹177 Cr). The Fertiliser segment stayed loss-making at ₹(38) Cr, a touch wider than the year-ago ₹(35) Cr loss as higher input and fixed costs offset better realisations, but narrower than Q1's ₹(85) Cr loss — management attributes the sequential improvement to the revised Neem urea energy norms (6.20 → 6.37 Gcal/MT effective April 2025) and lower input costs. Management also cited war-linked high energy/fuel prices as a sector-wide cost headwind and noted the quarter saw liquidation of inventory built up at the start of the period. On the guidance side, capex execution — Ammonia Expansion (50 KTPA), Weak Nitric Acid-III (200 KTPA), Ammonium Nitrate-II (163 KTPA) and the new CFBC steam boiler at Bharuch — is running "by and large as per schedule" against the FY27 capex guidance of ₹1,500-1,800 Cr; the ₹250-300 Cr A.T. Kearney cost-saving target flagged on the last call remains unquantified in this quarter's P&L, consistent with the margin compression seen here. Separately, the company disclosed (note 3) an outstanding DoT demand of ₹21,370 Cr for VSAT/ISP license fees spanning FY06-FY20 — a legacy telecom-license matter unrelated to the fertiliser/chemicals business — with no P&L provision made as management and auditors assess an adverse outcome as remote. H1 FY27 PAT of ₹495 Cr (vs H1 FY26's ₹255 Cr) is flagged by the company itself as not comparable given an 18-day planned shutdown at Bharuch in April 2025.