Excellent Q4 Numbers of GSFC- Overlooked by the Market

GSFC posted excellent Q4 FY21 numbers on QoQ as well as YoY, as also, FY21 over FY20. Just to summarise, Q4 PBT is at Rs. 162 cr, against Rs. 88 cr YoY, and Rs. 114 cr QoQ. PAT is at Rs. 150 cr, against Rs. 62 cr, YoY and Rs. 97 cr QoQ. FY 21 EPS is at Rs. 11.30 against Rs. 2.75 of FY20. In Q4, Fertiliser segment shown a fall in EBIT, which was picked by market in isolation, and not analysed by Market and Media correctly, which is usual of them, due to lack of knowledge or vested interests.

On Balance Sheet front, things improved  to a great extent. Subsidy receivable from Govt fell to Rs. 509 cr, as at 31-3-21 against Rs. 1,791 cr on 31-3-20. This made working capital loan falling to Rs. 35 cr from Rs. 1,412 cr. Cash and equivalent rose to Rs. 1,200 cr from Rs. 150 cr, while Inventory fell to Rs. 997 cr from Rs. 1,374 cr. Even receivables, halved to Rs. 468 cr, from Rs. 850 cr. Investment value rose to Rs. 4,330 cr, from Rs. 2,087 cr. This has further rose to over Rs. 5,000 cr as on date, due to rise seen in 45 days of FY 22.

To simplify it further, FY21 Fertiliser EBIT was at Rs. 369 cr, of which, Rs.106 cr came in H2 and Rs. 263 cr in H1 of FY21. So expect Rs. 400 cr EBIT in FY 22 from this segment, due to Subsidy hike of Rs. 700 per bag given by Govt, on DAP recently.

Industrial product had an EBIT of Rs. 126 cr, of which Rs. 129 cr came in H2, due to margins seen sky rocketing. Incidentally, FY20 EBIT was in negative at Rs. 69 cr in FY 20. Expect EBIT of Rs. 230 cr or more in FY22 from this segment.

FY 22 EPS is seen at Rs. 18, which makes share rule at a PE of  6.5x. Even present m cap of Rs. 4,600 cr, is at 75% NPV of Investments and Cash equivalent of Rs. 6,200 cr, with core business seen coming at free. Book value at 31-3-21 at Rs. 231 will rise to Rs. 245, making stock rule at a PBV of sub 0.5x.Cash is at Rs. 30 per share, even after keepig aside diviend of Rs.88 cr declared for FY 21.

Maybe, once stock is mopped up by the strong hands, will see it rising. This has happened with many of our calls like CG Power, Balaji Amines, Hikal, Vedanta, Ineos etc, while list is endless.

Keep fingers crossed.  

This is not a buy recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.