IGI Logo

* Gujarat Fluorochemicals Ltd. (FLUOROCHEM) has reported a growth of 41.2% in its revenues at ?14,179 million in Q3-FY23 as against ?10,039 million in Q3-FY22. The growth was mainly driven by strong performance in Fluorochemicals and Fluoropolymers business growing by 195% 40.8% YoY respectively. The Bulk chemicals business reported a de-growth of 12% in the quarter

* On profitability front, the company has reported operating margins of 34.7% at ?4,922 million in Q3-FY23 as against 31.2% at ?3,133 million in Q3-FY22, an increase of ~350 basis points. The increase in margins was due to better overall performance led by both volume and realisation. The company’s profit after tax (PAT) margins for the quarter stood 24.5% at ?3,478 million as against 20.3% at ?2,036 million in Q3-FY22. ? On segment basis, the company has reclassified its business segments into three from earlier five segments. The new segments are Bilk chemicals including caustic soda, MDC and CMS, Fluorochemicals and Fluoropolymers. The Bulk chemicals segment posted de-growth of 12% YoY basis due to lower realisation on back of excess supply. The Fluorochemicals segment posted strong growth of 196% YoY. The performance was on back of stable price and volume and gradual ramp of new capacity to continue to augment growth in future.

* The Fluoropolymers segment, Volumes and prices remained stable during the quarter. In addition to de-bottlenecking of PTFE capacity, additional capacities for new fluoropolymers are being set-up and revenues are expected to ramp up, from Q4-FY23 onwards, over the next few quarters.

* On capex front, the company’s planned capex of ?25,000 million in two years FY23 & FY24 towards expanding its capacities for Chemicals for backward integration, Fluoropolymers and New Age Products is progressing well and company has started adding incremental capacities in both Fluorochemicals and Fluoropolymers segment. The revenues from new capacities are expected to gradually pick-up starting Q4- FY23. Also, the company’s new 20Mw wind power project is also scheduled to start by Q1-FY24 which could result is power cost savings for the company. On New age products, the company’s investment in battery chemicals is progressing as per plan and initial commercial capacity is expected to start by Q1-FY24.

* We believe FLUOROCHEM has created a niche for itself in its fluoro-chemicals business and is better poised to explore markets for more value added products including in surise sectors like electric vehicles, advanced Fluoroploymers while continue to gain from its backwards integrated and diversified businesses. We continue to remain positive on the stock and maintain our BUY rating on the stock with a target price of ?3,910 per share.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at  https://www.rathi.com/LeadGenerate/Static/disclaimer.aspx
SEBI Registration No.: INZ000170832

Above views are of the author and not of the website kindly read disclaimer