Gujarat Fluorochemicals Ltd (FLUOROCHEM)
Date – 19th October 2022
Consolidated Revenue for Q2FY23 was Rs. 1461 Cr up by 52% on a YoY basis. Consolidated EBIDTA for Q2FY23 was Rs. 536 Cr up by 81% on a YoY basis. The EBIDTA margins for Q2FY23 were 37% as against 31% in Q2FY22. Consolidated PAT for Q2FY23 was at Rs. 357 Cr up by 74% on a YoY basis. RoCE & RoE improved to 36.88% & 29.05% respectively.
Caustic soda revenue stands at 189 cr (Q2FY23) v/s 102 cr (Q2FY22). Refrigerants stands at 268 cr Q2FY23) v/s 92 cr (Q2FY22), Chloromethanes were down due to prices of MDC as compared to the previous quarter.
Additional capacities commissioned for FKM, PVDF and PFA during the quarter are under stabilizing and sales are expected to ramp up from Q3FY23 onwards. For fluoropolymer (PTFE) De-bottlenecking of capacity is underway.
Commissioning of new plants in Q2FY23 has spilled over to Q3FY23. New plants which have been commissioned are expected to gradually ramp up production in the upcoming quarters.
Refrigerants R125 company is largely exporting to US where they had huge order which were supposed to be executed in the current quarter and company was able to fully execute that and this kind of growth will continue in future. Due to increased sales of R125 volumes and Prices have improved.
Q3 onwards 2 new additional reactors for FKM are going to get commissioned and additional sales will be visible from January 2023. Capacity addition for FKM is 200 tonnes per month and for PVDF company is adding 100 tonnes per month which will come in line in January next year.
Currently as of today company is around 900 metric tonnes. Company will be at 1500 metric tonnes by the end of year 2022.Ramp up will be seen in next 6-8 months.
Margins are impressive currently so coming forward they are going to maintain their margins upwards of 30%
During the quarter there was a fair mix of both volume and value growth for the revenue growth of 50% for this quarter.
For R32 company is planning for capacity of 10,000 tonnes with a Capex of 125 cr+ targeting both the markets domestic and globally. This plant will be commissioned by the end of March 2024.
For R32 as there is huge demand coming in specially from India and mainly as substitution of R22. Looking at growth potential from US, Europe and middle east company is adding more capacity to fill the vacuum.
70-75% of capacity utilization for R125 and there is more room for growth.
In next 1-2 quarters there will be a good application from the semi-conductors. Samples have been sent to customers and internal checks have been done.
Company is setting up India’s first PVDF solar film project which will be commissioned in the next financial year by June. With their own integrated PVDF manufacturing facilities, this plant will be ideally suited to cater to both the domestic and international markets.
Business growth from speciality chemical will be seen from upcoming quarters.
Company is expanding their capacities and that will boost the future growth, development of newer grades has resulted into expansion of volumes for all the fluoropolymers in all geographies.
There has been supply constraint in US and Europe due to raw material disruptions for PVDF AND FKM, but sales for the company is robust and company would be able to capture this by additional capacities.
EV manufacturing in US and Europe will be bigger opportunity as well as in India almost a dozen companies are planning to set up EV Battery manufacturing plants in India over the next few years, in line with the Government push to make India a significant global manufacturer of EV vehicles.
Company is in the process of tie up with lithium suppliers.
Company’s free cash flow will be utilized for future growth rather than acquiring external debt.