Tanfac Industries Ltd Q2FY26 – From Dormant Acid Maker to Fluorine Freak with a Billion-Rupee Glow-Up

1.At a Glance

Tanfac Industries is that quiet batchmate you ignored in school, who shows up at the reunion driving a supercar. Once a sleepy joint venture between Aditya Birla and TIDCO, this fluorine chemist has turned into a ₹4,000 crore market-cap juggernaut, compounding profits faster than you can spell “hydrofluoric acid.”

At ₹4,004 per share, it’s up 105% in the past year — and the market’s still drooling. The stock trades at aP/E of 42.5, book value ₹340,ROE 32%,ROCE 42%, and negligible debt (₹31 crore).Latest quarter?Revenue ₹169 crore,PAT ₹17.2 crore, down 11% QoQ but still sizzling after a 51% YoY sales jump.

In FY25, Tanfac clocked₹695 crore in revenueand₹94 crore in PAT, with margins around 20%. All this with just one main plant sitting calmly in Cuddalore, Tamil Nadu — proving you don’t need 12 factories if one can spit gold.

2.Introduction – The Revenge of a Boring Chemical Company

Picture this: It’s 2019. Tanfac is a forgotten smallcap selling acids to fertilizer companies. Cut to 2025 — it’s doubling capacity, signing Japanese contracts, and making fluorine sexy again.

You know a company’s arrived when retail investors start Googling “what does hydrofluoric acid do?”

What started as an inorganic chemicals factory is now a precision fluorine house, with customers spanning aluminum smelters, glass makers, steel rerollers, and specialty chem players. Its partnership withAnupam Rasayanlit the fuse — ARIL bought Birla’s stake in 2022 and turned Tanfac into its captive fluorine arm.

Since then, capex after capex, and suddenly, the company’s EBITDA looks like it’s been on creatine. From ₹72 crore in FY24 to ₹142 crore in FY25, it’s been a chemical transformation worthy of Breaking Bad — minus the crime, plus dividends.

3.Business Model – WTF Do They Even Do?

Tanfac makes fluorine-based chemicals, but saying that undersells how dangerous and critical their products are. Their breadwinner,Hydrofluoric Acid (HF), is an ingredient that can etch glass, clean semiconductors, refine petroleum, and dissolve rust (and, uh, humans — not recommended).

Here’s the fun lineup:

• Core Acids:Hydrofluoric, Sulphuric, and Oleum.
• Derivatives:Aluminum Fluoride, Potassium Fluoride, Potassium Bifluoride.
• Specialties:Boron Trifluoride complexes, Poly Aluminum Chloride, and Peracetic Acid.
• By-products:Calcium Sulphate (Gypsum).

They’re now upgrading from bulk to high-value chemicals likesolar-grade difluorideandrefrigerant gases— exactly where margins hide.

Customers? 300+ across 10 countries — including the U.S., Japan, Israel, Brazil, and UAE. You’ll find Tanfac’s molecules quietly working inside everything from your car AC to your toothpaste to industrial catalysts.

Business is split:

• Domestic: 82%
• Exports: 18%

With expansion and new Japanese contracts, that 18% export slice could soon be the tastiest piece of the pie.

4.Financials Overview

Commentary:Margins softened as the new hydrofluoric acid line ramped up — the usual capex hangover. But revenue jumped 51% YoY, proving the expansion’s working. The PAT dip is more a digestion burp than a trend.

5.Valuation Discussion – Fair Value Range (Educational Only)

(A) P/E