The brokerage likes Gujarat Fluoro's strategic positioning, as the company enjoys a distinct first-mover advantage with the largest battery chemicals portfolio in India. Gujarat Fluoro is capable of addressing 70% of the total value (cost) requirement for LFP batteries, establishing the company as a critical player in the evolving non-Chinese global supply chain.
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ICICI Securities Report
The brokerage firm ICICI Securities has upgraded Gujarat Fluorochemicals Ltd. to a Buy from Add rating with a revised target price of Rs 5,380, valuing the stock at 35 tiomes FY29E earnings per share.
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The brokerage likes Gujarat Fluoro's strategic positioning, as the company enjoys a distinct first-mover advantage with the largest battery chemicals portfolio in India.
Gujarat Fluoro is capable of addressing 70% of the total value (cost) requirement for LFP batteries, establishing the company as a critical player in the evolving non-Chinese global supply chain.
The company benefits immensely from its in-house access to critical HF, alongside its proven expertise in processing fluorine chemistry and managing high-temperature calcination. Having already established pilot-scale capacities, Gujarat Fluoro has spent the past four years navigating a steep learning curve.
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Risks
Upside risks
- Gujarat Fluoro EV scaling faster than the brokerage's conservative estimates and meeting management's guidance due to rapid multi-client global validation.
- Better-thanexpected price realisations and quota allocations in the HFC segment.
- Continued volume and margin strength across fluoropolymers segments.
Downside risks
- Delay or slower-than-anticipated commercial scaling in Gujarat Fluoro EV or margin contraction below our 19% estimate.
- Weakness in global HFC pricing or a lower-than-expected regulatory volume quota allocation.
- A cyclical reduction in global fluoropolymer volumes.
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