- 14 Aug 2024
- ICICI Securities
Gujarat Fluorochemicals Q1FY25 - Fluoropolymers drive sequential improvement
News: Revenues grew 4% QoQ to ₹ 1176 crore driven by flagship Fluoropolymers business (up 6% QoQ). On the other hand, both Fluorochemicals (down 2% QoQ) and more commoditised Bulk Chemicals segment (down 4% QoQ) were laggards. EBITDA grew 10% QoQ and margins stood at 22.3% (up 130 bps QoQ). Fluoropolymers (58% of sales)- Despite 1-2 weeks of revenue loss due to red sea crisis, the performance improved sequentially mainly due to some niche launches. Fluorochemicals (25% of sales)- Specialty chemicals remained muted during the quarter and continue to face headwinds from Chinese competition. Bulk Chemicals ((14% of sales)- Caustic soda prices have marginally increased however the MDC prices have softened further.
Views: Fluoropolymers segment is witnessing recovery and brighter future with changing global dynamics. The company has invested heavily in high-grade Fluoropolymers capacity build up over the last few years. This, coupled with exit of some global legacy players is expected to improve the growth prospects of Fluoropolymers in FY25. Other segments such as Fluorochemicals and Bulk chemicals however are expected to remain muted on account of Chinese dumping and excess capacity built-up. We expect Fluoropolymers and the newly inducted battery chemicals segment to drive growth in the future.
Impact: Positive