Alufluoride Ltd Q2 FY26 – India’s Aluminium Fluoride King Delivers 25% Operating Margin, Expands Beyond Borders and Borders of Logic

1. At a Glance

Alufluoride Ltd — the quiet yet explosive chemical genius of Vizag — just pulled off a 25.4% operating margin in Q2 FY26, while most commodity players were crying about raw material prices. The ₹334 crore market cap warrior, trading at ₹428 per share, has given investors a chemistry lesson in how fluorine derivatives can actually make money (and not just fumes).

In a world where aluminium smelters gulp down AlF₃ like college students gulp chai before exams, Alufluoride is the cool supplier — steady, reliable, and slightly nerdy about its process. For the September 2025 quarter, revenue touched ₹54.83 crore, up3% QoQand23% YoY, with PAT leaping to ₹7.91 crore — an18.8% QoQ jumpand a full “smirk-to-the-bank” 19% of sales. ROE? A confident20.8%, ROCE? A brawny23.6%. Debt-to-equity? A modest0.29, proving that this company runs more on chemistry than leverage.

At 16.3x P/E and with dividend yield of 0.7%, the company isn’t trying to be a flashy startup — it’s more like that old-school professor who keeps publishing A-grade papers while everyone else is busy rebranding.

2. Introduction – From Acids to Assets

Once upon a time in 1984, when “fluoride” was mostly something your dentist nagged you about, Alufluoride Ltd started making Aluminium Fluoride — a key ingredient used by aluminium smelters to reduce melting point and energy cost. Fast forward four decades, and the company is still doing the same thing… but much better and much bigger.

The company is India’slargest producer of low-bulk-density aluminium fluoride, which sounds fancy but really means they make the good stuff — high purity, low impurities, better efficiency. In FY24, they clocked record production of15,016 MTand sales of15,260 MT, proving that even in the world of chemicals, consistency is a superpower.

And while most midcap manufacturers are allergic to exports, Alufluoride went global withEmirates Global Aluminium, Novelis, and Egyptalumamong its clients. Their Singapore-based subsidiary and the now-famous (or infamous) Jordanian adventure may have hit turbulence, but hey — you can’t say they’re not ambitious.

So here’s a company that took sulphuric acid waste from fertilizer plants, turned it into a high-margin product, and now supplies half of India’s aluminium producers. If this isn’t industrial jugaad at scale, what is?

3. Business Model – WTF Do They Even Do?

Let’s break this down.

Alufluoride Ltd’s business revolves aroundAluminium Fluoride (AlF₃)— a compound used in aluminium smelting to reduce power consumption and improve efficiency. Think of it as the Red Bull for aluminium smelters — keeps them running cool and fast.

They also dabble inCalcium Fluoride(for glass and ceramics) andSilica, though these are more like the side dishes in a thali where AlF₃ is the main course.

The company sourcesfluorosilicic acid(a by-product of fertilizer plants like Coromandel International and IFFCO Paradeep), reacts it with aluminium hydroxide, and produces aluminium fluoride. The genius part? They use industrial waste to make a high-demand product — sustainability before it became LinkedIn cool.

Their production capacity stands at15,000 TPA, having expanded from 12,000 TPA recently. Clients likeHindalco, Nalco, Vedanta, and Balcoaren’t just names; they’re industry giants. If those giants sneeze, Alufluoride catches a cold — but so far, business has been quite healthy.

Internationally, the company supplies to the Middle East and Africa, proving that chemistry can be an export product too.

4. Financials Overview

Annualised EPS = ₹10.11 × 4 = ₹40.44 → P/E ≈ 10.6x on annualised basis.

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