Credit Rating

GUJARAT STATE FERTTLTZERS & CHEMTCALS LIM|TED Fertilizernagar - 391 750. Vadodara, Gujarat, lN DlA. CIN : 199999CJ1962P1C001121 NO.SEC/SE/REG -30 /2026 6'h October, 2026 The Corporate Relationship Department The Manager, Listing Department BSE Limited National Stock Exchange of India Ltd lst Floor, New Trading Ring 'Exchange Plaza', C/1, Block G Rotunda Bldg., P.J.Towers, Dalal Street Bandra-Kurla Complex FoG MUMBAI - 400 001 Bandra (East), MUMBAI - 400 051 SCRIP CODE: 500690 SYMBOL: GSFC Dear Sir / Madam, Sub.: lntimalion of Credit Ralins by CARE Rarinqs Limired Ref.: Resulation 30 read with Part A ofschedule III to the SEBI (Listins Oblisations and Disclosure Requirements) Regulations. 2015 Pursuant to the above-refened regulation, we inform that CARE Ratings Limited has, vide its letters dated october, 2026 received on 5'r' october, 2026, reaffirmed the following credit rating for availing credit facilities from banks and issuance of Commercial Papers (,'Cps") by the Company: Instrumen! Type Rating / Outlook Lon Term Bank facilities amounti to Rs.300 crore CARE AA+ ; Stable Short Term Bank facilities amountin to Rs.4,100 crore CARE AI+ Commercial Pa r of Rs.1,000 crore CARE AI+ Kindly take the above information on record Thanking you, Yours faithfully, For Gujarat State Fertilizers & Chemicals Ltd., Nidhi Pillai Company Secretary & Vice President (Legal & HRS) Membership No.: Al5l42 E-mail : investors@gsfcltd.com Encl.: ay'a Ph. : (O) + I 1 -265-2 242451, 2242651, 22427 51, 2242641 $ Fax: +91-265-2240966 . Emait : ho@gsfcltd.com . Website : wwwqsfctimited.com lS0 9001,6014001,lS0 45001 & tSO 50001 Gertitied Gompany Press Release Gujarat State Fertilizers and Chemicals Limited October 01, 2026 Facilities/Instruments Name of the Regulator1 Amount (₹ crore) Rating2 Rating Action Long-term bank facilities RBI 300.00 CARE AA+; Stable Reaffirmed Short-term bank facilities RBI 4,100.00 CARE A1+ Reaffirmed Commercial paper RBI 1,000.00 CARE A1+ Reaffirmed Details of instruments/facilities in Annexure-1. Rationale and key rating drivers Ratings of Gujarat State Fertilizers and Chemicals Limited (GSFC) continues to derive strength from its established and integrated operations in fertilizers and industrial chemical products, with a diversified product profile and a dominant market position in most of its products and strategic investment towards backward integration for securing the supply of key raw materials. Ratings also derive comfort from its comfortable leverage and strong liquidity position. However, ratings continue to be constrained by risks associated with regulated nature of the fertilizer industry, volatile raw material prices, with high reliance on subsidy budget of the Govt. of India (GoI), which can potentially result in an elongation of the operating cycle, and increase reliance on short-term borrowings, fluctuation in forex rates, and cyclicality associated with other industrial products. GSFC reported healthy revenue growth of 15% y-o-y to ₹10,957 crore in FY26, driven by healthy growth in fertilizer volumes sales. However, a sharp increase in raw material costs, particularly in H2FY26, and lower nutrient-based subsidy (NBS) rates, compressed fertilizer margins had led to segment losses in Q4FY26. The impact was largely mitigated by a strong recovery in the industrial products segment, supported by higher sales of Technical Grade Urea, HX Sulphate Crystal, traded ammonia and melamine exports, resulting in a marginal improvement in overall profitability margins. The company reported profit before interest, lease rentals, depreciation and tax (PBILDT) margins of 7.34% in FY26 against 7.02% in FY25. Fertilizer sales contributed 78% to the company’s revenue in FY26 (FY25: 77%). Amidst elevated raw material prices in Q1FY27, the company optimised its product mix and shifted towards urea and di-ammonium phosphate (DAP) sales, where profitability is protected through the subsidy framework, while scaling back complex fertilizer production. Urea and DAP sales increased to 1.6 lakh metric tonnes (MT) in Q1FY27 against 0.5 lakh MT in Q1FY26. While total fertilizer sales stood at 5.3 lakh MT in Q1FY27 against 4.5 lakh MT in Q1FY26. Revenue grew by 64% y-o-y to ₹3,583 crore in Q1FY27 aided by increase in realisation considering pass through of higher raw material cost under the GoI subsidy framework, while PBILDT margin stood at 6.5%. (Q1FY26: 8.8%; Q4FY26: 3.2%). While fertilizer margins remained subdued in Q1FY27, despite improving from Q4FY27, profitability from industrial products segment continued to remain healthy, aided by higher realisations and a sharp increase in the Capro-Benzene spread to US$816/MT from USD 540/MT, supporting the overall profitability margin. Overall scale of operations is expected to remain healthy in FY27 supported by healthy fertilizer revenue and improvement in industrial products revenue. Profitability margin is likely to be supported by calibrated product mix in the fertilizer segment and better margin in the industrial product segment. Movement in global raw material prices, particularly ammonia, sulphur, phosphoric acid and natural gas and H2FY27 NBS subsidy rates shall remain key monitorable. The company’s financial profile remains strong marked by comfortable capital structure and healthy liquidity position. As on March 31, 2026, overall debt stood at ~₹27 crore comprising primarily of working capital borrowings (~₹25 crore). The company’s working capital borrowings however increased to ~₹1,400 crore as on June 30, 2026, owing to increased working capital requirement led by increase in subsidy receivables from Government of India (GoI) amidst higher urea and DAP sales in Q1FY27. Subsidy receivables increased to ₹2,218 crore as on June 30, 2026, from ₹1,453 crore as on March 31, 2026 (₹1,087 crore as on March 31, 2025). The company’s liquidity continues to remain strong with cash and equivalents of ₹916 crore as on June 30, 2026, providing comfort. 1SEBI: Securities and Exchange Board of India; RBI: Reserve Bank of India; MCA: Ministry of Corporate Affairs; IRDAI: Insurance Regulatory and Development Authority of India; PFRDA: Pension Fund Regulatory and Development Authority. 2Complete definitions of ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 1 CARE Ratings Ltd. Press Release Rating sensitivities: Factors likely to lead to rating actions Positive factors • Significant diversification of GSFC’s operations to other fertilizer products and significant increase in its scale and earning return on capital employed (ROCE) above 25% on a sustained basis. • Improved profitability margin in both fertilizer & industrial products division leading to overall PBILDT margin of over 12% on a sustained basis. • Effective management of its working capital requirements with timely receipt of subsidy from GoI, resulting in contraction in its operating cycle to less than 90 days. Negative factors • Moderation in PBILDT margin to less than 7% on a sustained basis having an adverse impact on its debt coverage indicators. • Moderation in its market position in fertilizer business. • Significant build-up of subsidy receivables leading to elongation in operating cycle beyond 200 days on a sustained basis, which can adversely impact its liquidity. • Major debt-funded capex or increase in working capital borrowings to fund large subsidy receivables, leading to a deterioration in its total debt/PBILDT to over 3x on a sustained basis. • Adverse changes in the regulations governing the fertilizer industry and/or unforeseen material liability arising regarding long-pending disputed matters. Analytical approach: Consolidated CareEdge Ratings has adopted the ‘Consolidated’ analytical approach for GSFC, as there are strong operational and financial linkages among GSFC and its subsidiaries/associates. Companies consolidated are listed under Annexure-5. Outlook: Stable CareEdge Ratings [Showing first 8,000 characters — download PDF for full document]