FLUOROCHEM - Gujarat Fluoroch

📊 NSE: FLUOROCHEM 🏢 Chemicals 📅 Last Updated: 12/13/2025 22:43

💰 Financial Performance

Revenue Growth by Segment

Fluoropolymer segment revenue reached INR 764 Cr in Q2 FY26, growing 8% YoY from INR 706 Cr, though it declined 4% QoQ from INR 798 Cr. Fluorochemicals revenue was INR 258 Cr, a 15% YoY decline from INR 304 Cr and a 14.5% QoQ decline from INR 302 Cr. The chemical segment reported a PAT of INR 198 Cr, reflecting 51% YoY growth.

Geographic Revenue Split

Not explicitly disclosed by percentage, but significant exposure to the US and Europe is noted. US tariffs impacted sequential revenue in the Fluoropolymer segment by 4% and also affected R-125 sales.

Profitability Margins

EBITDA margins for Q2 FY26 stood at 32%, an improvement of 608 basis points YoY. Operating margins for the nine months ended December 31, 2024, were 23%, compared to 21.5% in the previous fiscal. Medium-term operating margins are expected to recover to 25-27%.

EBITDA Margin

32% in Q2 FY26, driven by a better product mix (high-value Fluoropolymers) and cost optimizations in power and manufacturing.

Capital Expenditure

Planned capital expenditure of approximately INR 1,400 Cr per annum for the next few fiscals, primarily targeting the new Fluoropolymer segment and EV battery chemicals.

Credit Rating & Borrowing

Reaffirmed by CRISIL. Interest coverage ratio is expected to sustain over 6 times (potentially over 8 times). Adjusted gearing is expected to remain below 0.6 times.

⚙️ Operational Drivers

Raw Materials

Fluorspar, R-142b, Chloroform, Chlorine, Anhydrous Hydrogen Fluoride (AHF), and Phosphoric Acid (PPA).

Capacity Expansion

Expanding capacities for new Fluoropolymers (PVDF, FKM, PPA) and LiPF6 (Battery Materials) with targeted completion by the end of FY 2025-26.

Raw Material Costs

Integrated operations (backward integration into AHF and HCFC) reduce dependence on external sources and support healthy operating margins of 25-27%.

Manufacturing Efficiency

Integrated operations drive efficiency; capacity utilization ramp-up for new Fluoropolymers is a key monitorable for medium-term growth.

Logistics & Distribution

Transitioning to an FOB (Free On Board) model for battery chemicals to improve working capital cycles compared to the stock-and-sale model used in Fluoropolymers.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Achieving 25% growth through the scale-up of value-added Fluoropolymers (PVDF, FKM) for the semiconductor and aerospace sectors, capitalizing on the exit of a major legacy international competitor (3M/Dyneon), and ramping up LiPF6 production for the EV battery market starting Q4 FY26.

Products & Services

PTFE, PVDF, FKM, PPA, LiPF6 (Battery Materials), R-22, R-125, R-32, Chloromethanes, and Caustic Soda.

Brand Portfolio

Gujarat Fluorochemicals Limited (GFL), GFCL EV.

New Products/Services

High-purity grades for semiconductors, aerospace, and automobiles (commenced Q2 FY26); LiPF6 battery materials expected to contribute to revenue from Q4 FY26.

Market Expansion

Targeting high-growth sectors including Semiconductors, EV Batteries, and Aerospace globally.

Market Share & Ranking

Positioned as one of the only non-China fully integrated LiPF6 producers globally.

Strategic Alliances

GFCL EV (subsidiary) raised INR 1,000 Cr in equity to fund battery chemical capex.

🌍 External Factors

Industry Trends

The Fluoroelastomers market is projected to grow at a 2.8% CAGR from 2025 to 2034, reaching USD 1.81 Billion. The industry is shifting toward high-performance polymers for EV and Semiconductor applications.

Competitive Landscape

Facing domestic competition in PTFE and international competition from Chinese producers; benefiting from the exit of a major legacy player in the US market.

Competitive Moat

Moat is sustained by deep backward integration, a wide product portfolio in PTFE, and being the only non-China integrated LiPF6 producer, which is critical for global supply chain diversification.