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Prabhudas Lilladher Report
Gujarat Fluorochemicals Ltd. consolidated revenue from operations was at Rs 11.3 billion (-23% YoY/ 14.2% QoQ), QoQ improvement was primarily led by Fluoro Polymers and Fluoro Chemicals.
Even though, the plants for the Bulk Chemicals segment ran at full capacity, the segment saw a 1% QoQ decline in revenue due to subdued prices of Caustic Soda/MDC.
Looking ahead to FY25, challenges loom for the Fluorochemicals segment, factors such as dumping from China, duty cuts in the U.S. market impacting Refrigerants, and the phase-out of R-22 are anticipated to exert pressure on volumes and prices.
Fluoropolymer capacities setup in FY24 are expected to fuel a continuous increase in sales with enhanced utilisation levels. Additionally, progress in the Battery Chemical vertical is promising, with the LiPF6 plant already commissioned, commercial sales expected from H2 FY25 upon customer approval.
The stock is trading at 65 times FY25 earnings per share.
We downgrade Gujarat Fluorochemicals to “Reduce” from “Hold” previously, with target price of Rs 3,402, valuing it at 40 times FY26 earnings per share.
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