Gujarat Fluorochemicals Shares Upgraded To 'Hold' By PL Capital Post Q1 Results — Check Target Price

Gujarat Fluorochemicals' consolidated revenue stood at Rs 12.8 billion, up 8.9% YoY and 4.6% QoQ (brokerage estimate: Rs 12.2 billion, Consensus: Rs 12.6 billion), coming in 4.6% above our estimates. Growth was led by the Fluoropolymers segment, which reported its highest-ever revenue, rising 16% YoY and 12% QoQ. Fluorochemicals grew by 2% YoY, while Bulk Chemicals declined by 12% YoY.

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PL Capital Report

Following the recent price correction and commercialization of R32 ahead of schedule, we upgrade Gujarat Fluorochemicals Ltd.'s stock to ‘Hold’ with a revised target price of Rs 3,580, valuing it at 48x FY27E EPS.

Gujarat Fluorochemicals reported consolidated revenue from operations of Rs12.8bn, marking an increase of 8.9% YoY and 4.6% QoQ. The topline growth was driven by the Fluoropolymers segment, which grew 16% YoY and 12% QoQ, supported by higher volumes and a favorable product mix.

This segment is expected to grow ~25% in FY26, aided by the exit of a key global player from Dec’24. The Fluorochemicals segment delivered a modest 2% YoY growth, but declined 7% sequentially, due to lower sales of R410A and R125 in the USA.

However, R22 prices rose during the quarter and are expected to remain elevated due to global production quota cuts. Gujarat Fluorochemicals also commercialized its R32 capacity during Q1FY26 and aims to ramp it up to 20,000mtpa by the end of FY26.

The Bulk Chemicals segment reported a 12% YoY decline, impacted by lower caustic soda prices and planned shutdown of the CMS unit. The Battery Chemicals segment is expected to begin contributing to revenue from H2 FY26, with meaningful ramp-up from FY27.

Product validation is currently at an advanced stage. Going forward, overall growth will be driven by the Fluoropolymers segment, rising refrigerant prices, and commencement of the Battery Chemicals business.

The stock is currently trading at 47x FY27 P/E. Upgrade to ‘Hold’ rating.

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