InvestorQ : What is the reason behind the sharp spike in the stock of GSFC?
ishika Banerjee made post

What is the reason behind the sharp spike in the stock of GSFC?

4 weeks ago

GSFC or Gujarat State Fertilizers & Chemicals, was up 15% on Friday at Rs164 after the company reported strong June quarter numbers. The net profits more-than-doubled to Rs346 crore. Even on a sequential basis, the net profits were up 21%. Revenues from operations surged by 63% yoy to Rs3,018 crore. Revenues also grew by nearly 50% sequentially. From its recent lows, the stock is up nearly 39%. The big macro story for GSFC is the stable growth in the agriculture sector over the last two years.

There are several reasons. The normal monsoons and improved reservoir levels as well as higher coverage under assured irrigation and remunerative crop prices have given a boost to the agri output. In addition, the government has been generous in doling out fertilizer subsidies to Agri companies. The friendly MSP policy has favoured the farmers and allowed them to invest more money in inputs, technology etc so as to enhance output. These factors have combined and have been the key growth drivers for the agriculture sector.