Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) reported a 48 percent slump in its net profit for the fourth quarter of FY2023, ending March 31, 2023. The company declared a dividend of Rs 30 per share.
The company’s net profit declined to Rs 336 crore from Rs 635 crore in the corresponding period last year. Revenue from operations also decreased to Rs 5,890 crore from Rs 6,722 crore in the same quarter last year. GNFC attributed the decline to higher cost of raw materials and lower sales volume due to Covid-19 pandemic.
Impact on Share Price
The news had an immediate impact on GNFC’s share price which fell by 2 percent after the announcement was made. Analysts believe that the decline in profits is likely to be temporary and that the company will be able to recover as soon as economic conditions improve.
Despite reporting a 48 percent decline in net profits, GNFC declared a dividend of Rs 30 per share for its shareholders. This is significantly lower than the dividend declared last year which was Rs 75 per share. The company said that it has taken this decision keeping in mind current market conditions and its commitment towards rewarding shareholders for their long term investments.
Overall, despite posting a decline in profits, GNFC has managed to declare a dividend for its shareholders which is commendable given the current market conditions. Going forward, investors are hopeful that the company will be able to bounce back and report better results next quarter.