Gujarat Fluorochemicals Q4 Results Review - New Age Projects To Commercialise In FY24E: Centrum Broking

Centrum Broking Report

Gujarat Fluorochemicals Ltd.’s Q4 performance was largely in line with our expectations. Bulk chemicals performance was impacted due to plummeting Chlor-Alkali realisations/ ECU which was made up by fluorochemicals segment, supported by both volumes and prices.

Doubling of fluoropolymers capacity is underway with benefits accruing from Q2FY24E.  During FY23, exports accounted for over 60% (49%) of revenues due to rising contribution from fluoropolymers.

Gujarat Fluorochemicals’ FY24E capex plan has been further enhanced to Rs 15.0 billion versus Rs 12.5 billion earlier with two-third capex on fluoropolymers and battery chemicals.

Management reiterated that guarantees to group companies have further reduced during the quarter and are expected to dissolve in current year. FY23 was a robust year for Gujarat Fluorochemical with pricing benefits coupled with volumes, leading to highest ever Ebitda margins.

We believe that FY24E performance to be in transition due to margin moderation along with new projects commissioning. Accordingly, we have tweaked our estimates and rolled over our valuations to FY25E.

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