gsfc - initiating coverage

March 5, 2012Apurva Shah (Research Analyst)[email protected] Karmarkar (Head Research)(022) 6630 8667Nilay Dalal / Sagar Mehta(Equity Sales)(022) 3290 3017

Gujarat State Fertilizers & Chemicals Ltd.

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Dalal & BroachaStock Broking Pvt. Ltd.

Initiating Coverage @ Dalal & Broacha

Dalal & Broacha Research is available on Bloomberg DBVS<GO>

Investment Case:Ammonium sulphate, a byproduct of Caprolactam has come under NBS (Nutrient BasedSubsidy), which offers margin stability in Fertilizer businessBefore NBS EBIT from fertilizer segment was highly volatile, post NBS companyhas consistently reported EBIT more than 13.4%. Pre NBS company has reportedaverage 11% EBIT since Q1 FY09 and post NBS (i.e. Q1 FY11 onwards) it has reportedaverage 17.4% EBIT.

Increasing Caprolactam - Benzene spreadGSFC is the largest Caprolactam producer in India with 70000 MT followed byFACT's 50000 MT capacity. It is better placed due to its integration of Nylon chips,filament yarn and well established company in fertilizer industry (By productAmmonium sulphate is used as fertilizer). After recent correction in Caprolactamprices, it has again started moving upwards. We expect the spread to stabilizearound 1400-1700 USD per ton in FY13.

Key fertilizer player in Gujarat regionAccording to ASSOCHAM's independent research, Gujarat has recorded highestagriculture growth in real terms among 15 non-special category states. Gujarathas recorded growth rate of 10.97% between 2000-01 to 2009-10. GSFC's "Sardar" isa very strong brand name in Gujarat and enjoys more than 50% market share inDAP, Ammonium sulphate and ammonium phosphate sulphate.

Strong financials with intrinsic valueAs on H1 FY12 it has a debt of Rs. 3.3 bn and cash of Rs. 8.5 bn, thus company holdsRs. 65.6 per share as cash. It also has investment value in listed companiescomes to Rs. 58.4 per share.

It has constantly maintained its EBIDTA margin above 12% and net margin above6% despite of government regulations (in fertilizer segment) and presence incommodity products due to its structural advantage. Its return ratios are alsoattractive compared to other fertilizer companies (excluding CoromandelInternational). ROCE and ROE was 32% and 30% respectively for FY11.

Outlook and valuation:Net debt free company with Rs. 65.6 per share as cash, Rs. 58.4 per share investmentvalue per share, positive operational cash flow and consistent dividend trackrecord with average 2.5% dividend yield puts GSFC in value stock category.

The stock is trading at 4.4x FY12E earnings of Rs. 89.5 and 5.0x FY13E earnings of Rs.79.7. We initiate coverage with a BUY recomendation on the stock at CMP for aprice target of Rs. 552.

BUYCurre nt Pri ce Rs 397Ta rge t Pri ce Rs 552Upside 39%52 We e k Ra nge Rs 316 / Rs 504

KEY SHARE DATAMarket Cap Rs 31.6 BN/$645.7MNEV / Sa les 0.6EV / EBIDTA 2.5Volume (BSE + NSE) 85498No of o/s shares 79.7Face Va lue 10Book Va lue 354.9BSE / NSE 500690 / GSFCReuters GSFC.BOBloomberg GSFC IN Equity

Shareholding (%)Period Dec-11 Sep-11Promoters 37.8 37.8MF / Ba nks / FI 27.1 27.1FII 11.4 10.3Publ ic & Others 23.6 24.8Total 100.0 100.0

50.0

70.0

90.0

110.0

130.0

150.0

170.0

GSFC Sensex

Year Net Sales % Growth EBIDTA OPM % PAT % Growth EPS P/E (x) ROE % RoCE %FY 10 40,191.9 -31.66 4,496.8 11.2 2,544.7 (49.0) 31.9 7.0 12.5 17.6FY 11 47,550.5 18.3 11,718.9 24.6 7,493.7 194.5 94.0 3.7 30.1 36.6FY 12E 50,979.7 7.2 11,320.4 22.2 7,135.2 -4.8 89.5 4.4 22.6 30.5FY 13E 53,810.7 5.6 10,536.0 19.6 6,355.5 -10.9 79.7 5.0 16.9 24.6

value for money....

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GSFC Ltd.

Structural and environmental benefits


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Ammonium sulphate, a byproduct has come under NBS, which offers margin stability in fertilizerbusiness.Ammonium sulphate is a byproduct of Caprolactam. Every ton of caprolactam generates approx.2.5 tons of ammonium sulphate. It contributes around 14% to fertilizer product revenue and 9%of total revenue for the company.

Before NBS EBIT from fertilizer segment was highly volatile (please refer above figure), post NBScompany has consistently reported EBIT more than 13.4%. Pre NBS company has reported average11% EBIT since Q1 FY09 and post NBS (i.e. Q1 FY11 onwards) it has reported average 17.4% EBIT.

Increasing Caprolactam - Benzene spreadCaprolactam mostly goes into the production of nylon, which is widely used in the manufacturingof hosiery, knitted garments, threads, ropes, filaments, nets and tyre cords.

Caprolactam is a global commodity and suffers from cyclical profitability for following reasons:o Volatile feedstock pricingo Variable Ammonium sulphate credit in fertilizer industryo Inter-polymer competition of Nylon 6 with other materials, principally Nylon 66 and

Polyesters

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Average Benzene-caprolactam spread for last 6 years is visible in following table, 9M FY12 wasbest for Caprolactam manufacturers, but recently price of Caprolactam has started comingdown and spread should also come down due to stability in Benzene prices. We expect thespread to stabilize around 1400-1700 USD per ton in FY13.

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GSFC Ltd.

Year Avg. spread (USD)FY 06 1213FY 07 1016FY 08 1197FY 09 1019FY 10 994FY 11 15529M FY12 2022

GSFC is the largest Caprolactam producer in India with 70000 MT followed by FACT's 50000 MTcapacity. It is better placed due to its integration of Nylon chips, filament yarn and wellestablished company in fertilizer industry (By product Ammonium sulphate is used as fertilizer).Caprolactam demand in India is expected to be around 1.22 lacs MTPA.

GSFC's 65-70% of revenue comes from fertilizer division and contributes 45-55% at EBIDTAlevel; balance is contributed by Industrial products. So in a nutshell Industrial products aremore profitable compared to fertilizer business. Following charts reflects break up of fertilizerand industrial product business.

Above charts reflects segment wise top line and EBIT contribution. In FY 11 total revenue fromfertilizer products was Rs. 31 bn (65.4% of revenue) and industrial products was Rs. 16.2 bn(34.2%). Break up of both the divisions is shown in following charts

Wide product offering and product integration

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GSFC's major advantage comes due to its product integration in industrial products and itsstrong foot holding in fertilizer business. Following are the key advantages for the company.. Fertilizer Segment

Key for complex fertilizer (DAP, NPK) lies in sourcing the key raw materials like PhosphoricAcid / Rock Phosphate, Sulphuric acid etc., GSFC has tie up with world majors for the keyraw material that plays a very important role amongst complex fertilizer producers with 8%market share.

It has also invested in JV in Tunisia; TIFERT where company has invested Rs. 120 Crs for 15%equity stake and will get 50% of the total output i.e. 1.8 lacs tons of assured supply ofphosphoric acid.

. Industrial ProductsAs mentioned earlier profitability in Caprolactam is associated with usability of AmmoniumSulphate and product demand of alternative products. GSFC's major advantage comes fromproduct integration from Caprolactam to yarn and usage of Ammonium sulphate. Followingis the broad chain of Caprolactam and its contribution to revenue.

Benzene---Caprolactam---Nylon chips---Nylon filament yarn

GSFC Ltd.

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According to ASSOCHAM's independent research, Gujarat has recorded highest agriculture growthin real terms among 15 non-special category states. Gujarat has recorded growth rate of 10.97%between 2000-01 to 2009-10.

GSFC's "Sardar" is a very strong brand name in Gujarat and enjoys more than 50% market sharein DAP, Ammonium sulphate and ammonium phosphate sulphate. In Urea apart from GSFC othermajor players are GNFC (GSFC's subsidiary), Kribhco and IFFCO. GSFC has wide product offeringsin fertilizer, bio fertilizer and seeds. It has marketing and service network with 133 farm informationcenters in Gujarat. It also provides 'Agro Development & Agro Services' to farmers.

GSFC Ltd.

Key fertilizer player in Gujarat region

New capex and top line addition

The company has already lined up investments in several projects and some projects are underconsideration. List of projects under construction and project under consideration is illustratedin following tables with expected project cost, expected commissioning and additional turnoverfrom the projects. Methanol and TIFERT will start contribution in the coming 2 quarters.

PROJECTS UNDER CONSTRUCTION

PROJECTS UNDER CONSIDERATION

ProjectEstimated investment

4th DAP / NPK train of 0.4 mn MT / year atSikka

250

Methyl Ethyl Ketone of 24000 MTPY 120Phosphoric Acid / SSP at Sikka 1000Integrated Fertilizer and petrochemicalcomplex at DahejUrea (1 mn MTPY), Caprolactam (0.1 mnMTPY), Melamine (40000 MTPY)

7000

Project CapacityProject cost (Rs. Cr)

Expected commissioning

Additional turnover (Rs. Cr)

Methanol 173000 MTPA 301 Q1 FY13 347TIFERT (GSFC’s stake) 180000 MTPA 120 Q2 FY13 1244Wind Mill V 50.4 MW 281 H2 FY12 31Nylon 6 15000 MTPA 125 Q3 FY14 285Annone Modernization 2500 MTPA 90 H2 FY13 20Bio fertilizers, WSF and Plant growth promoter

50 FY13

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Strong financials (net debt free company with consistent margins and attractive ratios) withintrinsic valueGSFC's current D/E is 0.1 and it has constantly maintained its EBIDTA margin above 12% and netmargins above 6% despite of government regulations (in fertilizer segment) and presence incommodity products due to its structural advantage. Its return ratios are also attractive comparedto other fertilizer companies (excluding Coromandel International). ROCE and ROE was 32% and30% respectively for FY11. It has generated cash profit above Rs. 4 bn since FY 07. Excluding capexrequirement for Dahej all the planned capex can be easily met through their internal cash flowgeneration.

As on H1 FY12 it has a debt of Rs. 3.3 bn and cash of Rs. 8.5 bn, thus company holds Rs. 65.6 pershare as cash and its investment value in listed companies comes to Rs. 58.4 per share. Investmentvalue of listed companies is shown in following table.

GSFC Ltd.

Sr. No. Company Name Stake Co's mkt capGSFC's market value of investment

1 GNFC 19.80% 1383 273.8

2 GIPCL 14.85% 1135 168.5

3 GACL 2.25% 1016 22.9

465.2

7.97

58.4

Rs. Cr

Total

No. of Outstanding shares

Per share investment value

Besides the above investment GSFC has also investment in several unlisted companies like Gujaratchemical port terminal co. ltd, Gujarat green revolution company ltd, GSPC Gas company ltd,Gujarat state petronet etc.,

The Gujarat State Fertilizer Company (GSFC) was promoted by the Government of Gujarat in 1962,in the joint sector, for the manufacture of fertilisers and heavy chemicals. GSFC, along with theGujarat government, promoted Gujarat Narmada Valley Fertilizer Company (GNFC), which has thelargest fuel-based ammonia plant and the largest single stream urea plant in the world whencommissioned. GSFC's first fertilizer rolled out of its production unit in 1967.

During the years 1974 to 1982 with serene policies of alteration, GSFC turned into manufacturingof Caprolactam, Nylon-6, Melamine and Argon. Subsequently, capacities were enhanced inCaprolactam and Melamine.

GSFC's incessant strive for product diversification and value addition has created a product mixranging from more than 24 brands of fertilizers to petrochemicals, chemicals, industrial gases,plastics, fibers and other products.

Company Background

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Plant details

GSFC Ltd.

Companies promoted by GSFC / Investments . Gujarat Narmada Valley Fertilizers Company (GNFC) - Fertilizer & Chemical company . Gujarat Industrial Power Company Ltd (GIPCL) - a Joint power plant . Gujarat Green Revolution Company Ltd (GGRC) - Micro irrigation . Tunisian Indian Fertilizers (TIFERT) - a JV in Tunisia to ensure phosphoric acid . Gujarat Chemical Port Terminal Company Ltd (GCPTCL) - Port . Effluent Channel Projects Ltd (ECPL) . Bhavnagar Energy Company Ltd (BECL) - Power project

Concerns: . Volatility in Benzene - Caprolactam prices . Rupee fluctuation . Dependence on Phosphoric Acid, a key raw material for manufacturing complex fertilizers. . Down side revision in subsidy rate for FY13 will result in reduced selling price which may

also affect volume of complex fertilizer.

Plant Details Major Products

Baroda UnitAn integrated fertilizer and chemical unit

Urea, Ammonium sulphate, , Ammonium Phosphate Sulphate, Caprolactam, Nylon 6, Cyclohexanone, Ammonia etc

SikkaA coastal Phosphatic fertilizer unit

DAP

Polymer Unit – Nandesari

An acrylic based Industrial product unit at Nandesari

Methyl Monomer, Sheets, Pellet

Fibre Unit - KosambaA Nylon 6 Filament yarn and Chips production

Nylon 6 chips, Nylon filament yarn

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Financials:

Net sales for 9M FY12 period have grown by 3.8% to Rs. 37.7 bn and PAT has de grown by 3.1% toRs. 5.6 bn. EPS for the 9 months stood at Rs. 66.2

For our FY13 projections we have taken Caprolactam prices at USD 2800 / T considering itsaverage price in last one year, increasing Benzene prices, GSFC's leadership position and itsproduct integration capabilities. For DAP we have taken 10% reduction in realization due tolower expected rates of subsidy for FY13 and softening raw material prices globally. We expectnet sales to grow at 8.5% CAGR for FY11-FY14 period

We expect a stable volume growth in Fertilizer and chemicals business. We have assumed 8%and 8.5% CAGR growth respectively for Chemicals and fertilizer segment during FY12-FY14 mainlyon account lower realizations.

GSFC is a net debt free company with Rs. 65.6 per share as cash, Rs. 58.4 per share investmentvalue per share, positive operational cash flow and consistent dividend track record with average2.5% dividend yield. This puts GSFC in value stock category.

The stock is trading at 4.4x FY12E earnings of Rs. 89.5 and 5.0x FY13E earnings of Rs. 79.7. Weinitiate coverage with a BUY recomendation on the stock at CMP for a price target of Rs. 552.

GSFC Ltd.

Outlook:

Valuation:

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Valuation:Weighted average target priceMethodologies

583.6 40.0% 233.4 Based on DCF for 9 years & 3% terminal growth rate583.8 30.0% 175.1 Bsaed on 3.4x EV/EBIDTA FY11E478.5 30.0% 143.5 Bsaed on 6x P/E FY11E

552.0397.239.0%

Current priceUpside/(downside) from current levels

Target price

Weight assigned

Weighted Avg price

Comments

Target price using DCF approachTarget price using EV/EBITDA approachTarget price using P/E approachWeighted average target price

EV/EBIDTA methodFigures (Rs mn)Company Price Sales EBIDTA OPM PAT PAT % FY12E FY13EDeepak Fertilizers 156.3 16,278.9 3,610.7 22.2 1,875.2 11.5 3.5 2.9Tata Chemicals 354.8 108,946.2 16,979.8 15.6 6,534.7 6.0 7.6 6.3Coromandel International 291.9 75,279.5 9,450.4 12.6 6,936.6 9.2 8.5 7.6Gujarat State Fertilizers & 397.2 47,550.5 11,718.9 24.6 7,493.7 15.8 2.1 2.0Average EV/EBIDTA 5.4 4.7Valuation metricsTarget EV/EBITDA multiple 3.42013E EBITDA 10,536.02013E EV 35,822.52013E Debt 3,323.32013E Cash 14,023.12013E Market Cap. 46,522.4No. of shares 79.7Target Price 583.8

CMP 397.2Upside/(Downside) 47.0

P/E methodFigures (Rs mn)Company Price FY11 FY12E FY13E FY12E FY13EDeepak Fertilizers 156.3 21.3 24.2 27.7 6.5 5.6Tata Chemicals 354.8 25.6 33.7 35.2 10.8 10.3Coromandel International 291.9 24.6 26.9 31.0 10.8 9.4Gujarat State Fertilizers & 397.2 94.0 89.5 79.7 4.4 5.0Average P/E 8.1 7.6Valuation metricsTarget P/E multiple 6.02013E EPS 79.7Target Price 478.5CMP 397.2Upside/(Downside) 20.5

FY11 EV/EBIDTA

EPS P/E

GSFC Ltd.

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DCF Valuation:

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Year FY 10 FY 11 FY 12E FY 13E FY 14E FY15E FY16E FY17E FY18E FY19E FY20E FY21EEBIT 3,087.5 10,254.8 9,733.0 8,775.7 10,213.0 10825.8 11475.3 12163.9 12650.4 13156.4 13682.7 14230.0Effective Tax Rate (33.5) (33.5) (33.0) (33.0) (33.0) (33.0) (33.0) (33.0) (33.0) (33.0) (33.0) (33.0)EBIT*(1-Tax Rate) 2,053.2 6,819.5 6,521.1 5,879.7 6,842.7 7,253.3 7,688.5 8,149.8 8,475.8 8,814.8 9,167.4 9,534.1Depreciation / Amortization 1,409.3 1,464.0 1,587.5 1,760.3 1,933.2 2049.2 2172.2 2302.5 2394.6 2490.4 2590.0 2693.6Change in Working Capital 1,935.6 (7,033.2) 4,277.6 (1,219.4) (533.7) (565.8) (599.7) (635.7) (661.1) (687.6) (715.1) (743.7)Capex (840.0) (162.8) (3,256.4) (3,000.0) (4,200.0) (4,452.0) (4,719.1) (5,002.3) (5,202.4) (5,410.5) (5,626.9) (5,851.9)

FCFF 4,558.2 1,087.6 9,129.7 3,420.6 4,042.2 4,284.7 4,541.8 4,814.3 5,006.9 5,207.2 5,415.4 5,632.1FCF Growth -76.1% 739.5% -62.5% 18.2% 6.0% 6.0% 6.0% 4.0% 4.0% 4.0% 4.0%Cost of Capital 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0%Weight Assigned 0 0 1 2 3 4 5 6 7 8 9Present Value 9129.7 3054.5 3223.2 3050.9 2887.8 2733.5 2538.5 2357.5 2189.4 2033.2

Sum of PV of FCFF 24,068.5Terminal Value calculationTerminal Growth rate 3%Terminal year Free Cash Flow 5,801.0Terminal Value 52,332.1 Terminal (g) 12.1% 13.1% 14.1% 15.1% 16.1%PV of Terminal Value 15,985.0 1% 618.2 582.1 552.9 528.9 509.0

2% 641.5 600.1 567.0 540.1 518.0Enterprise Value 40,053.5 3% 669.9 621.6 583.6 553.1 528.3Less: Debt (3,923.3) 4% 705.4 647.9 603.4 568.4 540.3Add: Cash & Investment 10,376.5 5% 750.9 680.7 627.7 586.8 554.5Market Capitalization 46,506.7No. of Shares 79.7Value per Share 583.6

Calculation of WACC

WACC for explicit forecast WACC for terminal growthExpected Market Return (Rm) 15.0% Expected Market Return (Rm) 15.0%Risk Free Rate (Rf) 8.5% Risk Free Rate (Rf) 8.2%Country Premium (Rm-Rf ) 6.5% Country Premium (Rm-Rf ) 6.8%Beta 0.70 Beta 1.00Cost of Equity 13.1% Cost of Equity 15.0%Cost of Debt 6.5% Cost of Debt 9.0%Tax rate 33.6% Tax rate 35.0%Post Tax Cost of Debt 4.3% Post Tax Cost of Debt 5.9%WACC 12.0% Long term debt to capital ratio 10.0%

WACC 14.1%Debt 3923.3Equity 28286.5 Terminal Growth Rate 3.0%Total 32209.8 Terminal Year Free Cash Flow 5157.1

Terminal Enterprise Value 46523.1Weight Assigned 6.0Terminal Value 21100.7

WACC

GSFC Ltd.

FINANCIALS

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Profit & Loss (Rs Mn) FY 10 FY 11 FY 12E FY 13E Cash Flow Statement (Rs Mn) FY 10 FY 11 FY 12E FY 13ENet Sales 40,191.9 47,550.5 50,979.7 53,810.7 Net Profit 2,544.7 7,493.7 7,135.2 6,355.5

Add: Dep. & Amortization 1,409.3 1,464.0 1,587.5 1,760.3Raw Materials (25,422.1) (25,827.1) (28,038.9) (30,672.1) Cash Profit 3,954.0 8,957.7 8,722.7 8,115.9Employee Cost (2,901.9) (2,641.2) (3,565.6) (4,100.5)Other Expenses (7,371.1) (7,363.3) (8,054.8) (8,502.1) (Inc) / Dec inCost of Sales (35,695.1) (35,831.7) (39,659.3) (43,274.7) Sundry Debtors (1,409.0) (2,665.3) 500.8 (465.4)

Inventories 1,344.9 463.1 (1,615.0) (403.3)Operating Profit 4,496.8 11,718.9 11,320.4 10,536.0 Loans & Advances (6,121.7) 6,246.7 (279.4) (321.3)Depreciation (1,409.3) (1,464.0) (1,587.5) (1,760.3) Sundry Creditors (455.8) 1,027.9 (194.8) 250.4PBIT 3,087.5 10,254.8 9,733.0 8,775.7 Others (391.6) (794.9) 368.9 405.8Other Income 1,130.1 1,012.0 906.2 811.5 Change in Working Capital (7,033.2) 4,277.6 (1,219.4) (533.7)Interest (306.2) (137.9) (99.7) (199.4) CF from Operating Activities (3,079.1) 13,235.3 7,503.3 7,582.1

Profit Before Tax 3,911.4 11,128.9 10,539.4 9,387.7 CF from Investing Activities 300.5 (4,655.1) (987.9) (4,200.0)Provision for Tax (1,346.6) (3,630.8) (3,404.2) (3,032.2)PAT 2,564.9 7,498.1 7,135.2 6,355.5 CF from Financing Activities 3,298.9 (3,317.0) (1,300.5) (700.5)

Minority Interest (20.3) (4.4) 0.0 0.0 Cash Generated (Utilised) 520.2 5,263.2 5,214.8 2,681.6Extraordinary Items 0.1 0.0 0.0 0.0 Cash at the start of year 381.4 601.2 6,126.7 11,341.5Reported PAT 2,544.7 7,493.7 7,135.2 6,355.5 Cash at the end of year 901.6 5,864.4 11,341.5 14,023.1

Balance Sheet (Rs Mn) FY 10 FY 11 FY 12E FY 13E Ratios FY 10 FY 11 FY 12E FY 13EEquity Capital 797.0 797.0 797.0 797.0 OPM 11.2 24.6 22.2 19.6Reserves 20,644.3 27,489.6 33,924.3 39,579.3 NPM 6.3 15.8 14.0 11.8Net Worth 21,441.2 28,286.5 34,721.2 40,376.2 Tax Rate (34.4) (32.6) (32.3) (32.3)

Def. Tax Lib + Def. Tax Assets 1,497.0 2,043.3 2,043.3 2,043.3 Growth RatioSecured Loan 1,747.5 980.8 980.8 980.8 Net Sales (31.7) 18.3 7.2 5.6Unsecured Loan 5,128.3 2,942.5 2,342.5 2,342.5 Operating Profit (47.1) 160.6 (3.4) (6.9)Total Debt 6,875.8 3,923.3 3,323.3 3,323.3 PAT (49.0) 194.5 (4.8) (10.9)Capital Employed 29,814.1 34,253.1 40,087.8 45,742.8

Per ShareGross Block 32,316.0 35,572.4 38,572.4 42,772.4 Earning Per Share (EPS) 31.9 94.0 89.5 79.7Accumulated Depreciation (21,501.1) (22,959.5) (24,547.0) (26,307.4) Cash Earnings (CPS) 49.6 112.4 109.5 101.8Net Block 10,814.8 12,612.9 14,025.4 16,465.0 Dividend 4.5 7.0 7.5 7.5Capital WIP 1,819.0 3,212.1 1,200.0 1,200.0 Book Value 269.0 354.9 435.7 506.6Total Fixed Assets 12,633.8 15,824.9 15,225.4 17,665.0 Free Cash flow (34.9) 107.7 81.8 42.4

Goodwill 0.0 0.0 0.0 0.0 Valuation RatiosInvestments 4,249.8 4,249.8 4,249.8 4,249.8 P/E (x) 7.0 3.7 4.3 4.9Inventories 6,111.0 5,647.9 7,262.9 7,666.2 P/B (x) 0.8 1.0 0.9 0.8Sundry debtors 6,215.8 8,881.0 8,380.2 8,845.6 EV / Sales 0.6 0.5 0.4 0.4Cash & bank 601.2 6,126.7 11,341.5 14,023.1 EV / EBIDTA 5.3 2.1 2.0 1.9Loans & advances and Other CA 8,109.1 1,862.4 2,141.7 2,463.0 Div. Yield (%) 2.0 2.0 1.9 1.9Sundry creditors (3,622.4) (4,650.3) (4,455.5) (4,705.9) FCF Yield (%) -15.7 31.4 21.1 11.0Other Liabi. (594.8) (733.5) (806.9) (887.5)Provisions (3,889.4) (2,955.8) (3,251.4) (3,576.5) Return Ratios (%)Working Capital 12,930.4 14,178.4 20,612.6 23,828.0 ROE 12.5 30.1 22.6 16.9Deffered Tax 0.0 0.0 0.0 0.0 ROCE 17.6 36.6 30.5 24.6Misc. Expense 0.0 0.0 0.0 0.0Capital Deployed 29,814.1 34,253.1 40,087.8 45,742.8

Gujarat State Fertilizers & Chemicals Ltd

GSFC Ltd.

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Disclaimer

This document has been prepared and compiled from reliable sources. While utmost care has been taken to ensure that

the facts stated are accurate and opinions given are fair and reasonable, neither the Company nor any of its Directors,

Officers or Employees shall in any way be responsible for the contents. The Company, its Directors, Officers or Employees

may have a position or may otherwise be interested in the investment referred in this document. This is not an offer or

solicitation to buy, sell or dispose off any securities mentioned in this document.

For Further details

Contact Email ID Contact No. Sector

Mr. Milind Karmarkar [email protected] 022 67141445 Head Research

Mr. Chirag Shah [email protected] 022 67141447 Head Equity Sales

Ms. Hiral Sanghvi [email protected] 022 67141444 IT, Retail

Mr. Kunal Bhatia [email protected] 022 67141442 Auto, Auto Ancillary, FMCG

Mr. Lalitabh Shrivastawa [email protected] 022 67141450 Banking & NBFCs

Mr. Ashutosh Garud, CFA [email protected] 022 67141448 Capital goods

Ms. Purvi Shah [email protected] 022 67141446 Pharma

Mr. Apurva Shah [email protected] 022 67141449 Agrochemicals, Fertilizers

Address :- 508, Maker Chambers V, 221 Nariman Point, Mumbai 400 021 Tel: 91-22- 2282 2992, 2287 6173, (D) 6630 8667 Fax:

91-22-2287 0092

gsfc - initiating coverage

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