Getty ImagesPromoters held 67.65 per cent stake in the company as of 30-Sep-2021, while FIIs owned 3.37 per cent, DIIs 4.11 per cent.

ICICI Securities has buy call on Gujarat Fluorochemicals with a target price of Rs 3086. Time period given by analyst is one year when Gujarat Fluorochemicals Ltd. price can reach defined target.

Gujarat Fluorochemicals Ltd., incorporated in the year 2018, is a Mid Cap company (having a market cap of Rs 23727.60 Crore) operating in Chemicals sector.

Gujarat Fluorochemicals Ltd. key Products/Revenue Segments include Other Products, Gases Refrigerant, Caustic Soda, Other Operating Revenue, Export Incentives, Scrap for the year ending 31-Mar-2021.

Financials

For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 1010.12 Crore, up 7.66 % from last quarter Total Income of Rs 938.27 Crore and up 55.64 % from last year same quarter Total Income of Rs 649.02 Crore. Company reported net profit after tax of Rs 204.94 Crore in latest quarter.

Investment Rationale

The brokerage initiates coverage on Gujarat Fluorochemicals (GFL) with a BUY rating and target price of Rs3,086 (upside 50% from CMP). GFL is in a sweet spot with its presence in fluoropolymers, demand for which is increasing driven by the new-age verticals of battery, solar panel and green hydrogen. GFL is in the process of expanding its capacity in fluoropolymers, which provides visibility on growth during our forecast period (FY21-FY24E). GFL is also expanding into other fluorine derivatives used in the new-age verticals, which expands the company’s addressable market and provides a vista of sustained growth. GFL has laid out a bold capex plan of Rs25bn over the next three years. It is likely to see its earnings grow at 45.9% CAGR over FY21-FY24E (on low base though), and RoCE (post-tax) improve from 6.7% to 18% over the same period. Despite the strong earnings outlook, GFL is trading at a reasonable P/E multiple of 20x FY24 vs 42.1x for Navin Fluorine and 27.5x for SRF.

Promoter/FII Holdings

Promoters held 67.65 per cent stake in the company as of 30-Sep-2021, while FIIs owned 3.37 per cent, DIIs 4.11 per cent.