Buy Gujarat Fluorochemicals; target of Rs 5015: KR Choksey

KR Choksey's research report on Gujarat Fluorochemicals

Gujarat Fluorochemicals Limited reported a revenue of INR 14,179mn in Q3 FY23 as against INR 14,613mn in Q2 FY23, a dip of 2.90% on a QoQbasis and an increase of approximately 41.25% on a YoY basis, as against INR 10,038mn in Q3 FY22. On operational front, the EBITDA stood at INR 5,232mn, substantially improved by 65.9% on a YoY basis, at INR 3,154 in Q3FY22 and decreased 2.4% on a QoQ basis, at INR 5,357mn in Q2FY23. The EBITDA margin stood at 36.9% as against 31.42% in Q3FY22 and 36.6% in Q2FY23. Net Profit stood at INR 3,305mn as againstINR 2,012mn (+64.2%) on YoY basis and INR 3,572mn (-7.5% ) sequentially, with NPM at 23.3% (+330 bps YoY/-110bpsQoQ). EPS during the quarter came atINR 30.09 vs 18.32 in the sameperiod last year.

Outlook

We maintain ‘BUY’ rating on the stock and apply a P/E multiple of 35x to its FY24E earnings, which yields an increased revised target price of INR 5,015per share.