Buy Gujarat Fluorochemicals; target of Rs 3910: Anand Rathi

Anand Rathi is bullish on Gujarat Fluorochemicals has recommended buy rating on the stock with a target price of Rs 3910 in its research report dated February 09, 2023.

Broker Research

February 12, 2023 / 21:55 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Anand Rathi's research report on Gujarat Fluorochemicals

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.

Outlook

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.

For all recommendations report, click here