Reduce Gujarat Fluorochemicals; target of Rs 2907: Prabhudas Lilladher

Prabhudas Lilladher recommended reduce rating on Gujarat Fluorochemicals with a target price of Rs 2907 in its research report dated August 14, 2024.

Broker Research

August 19, 2024 / 14:14 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Gujarat Fluorochemicals

Gujarat Fluorochemicals (FLUOROCH) reported consolidated revenue from operations of Rs11.7bn, declining 2.8% YoY but increasing 3.8% QoQ. These numbers were in line with our estimates. The Fluoropolymers segment showed sequential growth, though revenue for the quarter was impacted by the Red Sea crisis. The segment's contribution is expected to increase QoQ, especially in the second half of FY25. Demand for refrigerants surged, leading to improved volumes and prices, particularly for R-22. However, continued dumping from China resulted in muted demand for the Specialty segment. Even though caustic soda prices improved slightly, the Bulk Chemicals segment saw a 4% sequential decline in revenue due to ongoing softness in MDC prices. On a positive note, progress in the Battery Chemicals vertical is promising. The LiPF6 plant has already been commissioned, with commercial sales expected to begin in Q4FY25, upon customer approval.

Outlook

The stock is trading at 50x FY26 EPS. We maintain “REDUCE” rating on the stock, with target price of Rs2,907, valuing it at 44x FY26 EPS.

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