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Fluorochemical companies in the pink of health due to emerging R32 Refrigerant gas dynamics

ICICIdirect Research 31 Oct 2025 DISCLAIMER

Global dynamics for the manufacture of R32 refrigerant gas, which is used in the room / car ACs, refrigerators, is changing due to imposed restrictions on manufacturing of the same. 
As per one global agreement, global production of greenhouse gases such as hydrofluorocarbons (HFCs) including R32, has to go down phase by phase by 2047. This has already started in the developed countries since 2019 which is leading to lower supplies than demand in the global markets. 
Since India reduction will commence from 2032, Indian companies are aggressively indulging into capex to address the global shortages. 
The applicable quota for production will be determined by the average of FY24-26, hence the companies are rushing for the capex. 
Navin Fluorine has earmarked a capex of ₹ 240 crore with a revenue potential of ₹ 650-800 crore. This will add up to 15000 tons of R32 to the existing level of 9000 tons. SRF has an installed capacity of ~30000 tons while Gujarat Fluorochemicals will have ~20000 tons by FY26 end. 
We have a BUY rating on SRF with TP ₹3485 , Navin with TP ₹ 6370 and Gujarat Fluorochemicals with a TP ₹4345

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