Buy Gujarat Fluorochemicals; target of Rs 5380: ICICI Securities

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Fluorochemicals growth: Driven by R-32, with initial capacity expected to reach full utilisation by Q3FY27, and R-134a production on track for commissioning in Q4FY27.
  • Fluoropolymers expansion: Volume growth and improving realisations, with the company confident of sustaining 17–20% growth over the next couple of years.
  • Battery materials scaling: LiPF6 sales have commenced, and commercial supplies of PVDF/PTFE are expected from Q4FY27, with significant potential for PTFE from the adoption of dry electrode technology in batteries.
  • Debt and funding: The company plans to raise an additional INR 5–7bn over the next 3–4 months through discussions with sovereign and climate-focused funds.

Thesis Validation Checklist

To validate the thesis, watch for: full utilisation of R-32 capacity, sustained growth in fluoropolymers, successful scaling of battery materials, and the company's ability to raise necessary funds for expansion. Key signals include: R-32 and R-134a production levels, fluoropolymers revenue growth, LiPF6 and PVDF/PTFE sales, and the company's debt and funding position.