1. At a Glance
Tanfac, Tamil Nadu’s most profitable chemical wizard, is cooking hydrofluoric acid, melting margins, and casually dropping 88 Cr in PAT like it’s no big deal. Once an obscure joint venture, now a fluorine empire with ROCE that slaps harder than inflation. You’ve just entered India’s hottest acid trip (legally).
2. Introduction with Hook
Imagine a company that makes hydrofluoric acid, a chemical so potent it dissolves glass, and turns it into shareholder value that melts resistance.
- PAT growth (TTM): 76%
- Stock Price CAGR (5Y): 91%
This is not your average specialty chemicals firm. It’s basically the Breaking Bad of BSE.
3. Business Model (WTF Do They Even Do?)
- Core Products: HF acid, Aluminum Fluoride, Potassium Fluoride, Boron Trifluoride complexes (don’t ask, it’s magic), etc.
- Customers: Pharma, agrochem, nuclear, aluminum industries.
- Supply chain: Raw materials like fluorspar imported; plants in Cuddalore, Tamil Nadu.
- Moat: Critical chemicals, few competitors, regulated sector = pricing power.
- 2024 Bonus: Commenced 5,000 TPA Solar Grade DHF plant, expanding to 10,000 TPA.
Translation: They make chemicals no one understands but everyone needs.
4. Financials Overview
Revenue grew from ₹320 Cr (FY22) to ₹557 Cr (FY25).
PAT more than doubled in 3 years.
Margins solid like boron trifluoride.
| FY | Revenue (Cr) | PAT (Cr) | OPM | ROE |
|---|---|---|---|---|
| 2022 | ₹320 | ₹53 | 24% | 30% |
| 2023 | ₹375 | ₹56 | 20% | 33% |
| 2024 | ₹378 | ₹52 | 19% | 32% |
| 2025 | ₹557 | ₹88 | 23% | 33% |
Key Stat: Cash from Ops consistently ~₹30-40 Cr despite capex madness.
5. Valuation
Let’s apply some acid test formulas:
- P/E Method (TTM EPS ₹88.4):
- Industry avg: 35–45x
- FV Range = ₹3,500 – ₹4,200
- EV/EBITDA:
- EBITDA FY25: ₹129 Cr
- EV/EBITDA range: 12–16x → FV = ₹3,300 – ₹4,500
- DCF Model:
- Using 15% growth, 10% WACC → FV range = ₹4,000 – ₹4,800
EduVal Verdict™: Fair Value Range = ₹3,500 – ₹4,800
Currently at ₹4,480. Valuation entering “glass ceiling” territory.
6. What’s Cooking – News, Triggers, Drama
- 🔥 June 2025: 5,000 TPA Solar Grade DHF plant commissioned
- 📈 FY25 = Highest revenue and PAT ever
- 💀 April 2025: Tragic demise of MD K. Sendhil Naathan. Interim leadership in place.
- 🤝 June 2024: $81M framework signed with Japanese chemical giant (buzzword: “strategic”)
- 🏭 Oct 2024: 29,700 MT HF capacity unlocked
Tanfac is basically on a capex-fueled acid bender.
7. Balance Sheet
| Particulars (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity | 10 | 10 | 10 |
| Reserves | 174 | 220 | 302 |
| Borrowings | 0 | 0 | 41 |
| Total Assets | 252 | 301 | 426 |
Key Points:
- Zero debt until FY24, mild leverage in FY25 for plant expansion.
- Capex funded largely via internal accruals + minor debt = 10/10 capital discipline.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| 2023 | 43 | -40 | -6 | -3 |
| 2024 | 34 | -30 | -7 | -3 |
| 2025 | 33 | -42 | 32 | +23 |
Takeaways:
- Strong operating cash flow
- Investing big, not recklessly
- FY25’s ₹23 Cr bump = debt-fueled capex. Let’s watch repayments.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 48% | 33% | 42% |
| ROE | 33% | 32% | 33% |
| OPM | 20% | 19% | 23% |
| Debt/Equity | 0 | 0 | 0.13 |
| Inventory Days | 89 | 100 | 108 |
Verdict: Sexy.
Only caution: rising working capital (93 days). But we’ll allow it for capex kings.
10. P&L Breakdown – Show Me the Money
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Sales | ₹320 Cr | ₹375 Cr | ₹378 Cr | ₹557 Cr |
| EBITDA | ₹76 Cr | ₹76 Cr | ₹72 Cr | ₹129 Cr |
| Net Profit | ₹53 Cr | ₹56 Cr | ₹52 Cr | ₹88 Cr |
| EPS | ₹53.41 | ₹56.27 | ₹52.61 | ₹88.37 |
Observations:
- Steady EPS until FY25 blastoff
- Revenue jumped 47% YoY
- EBITDA margin expansion = real flex
11. Peer Comparison
| Company | CMP | P/E | ROCE | Revenue | PAT | Mcap |
|---|---|---|---|---|---|---|
| SRF | ₹3,182 | 75x | 12% | ₹14,693 Cr | ₹1,249 Cr | ₹94,337 Cr |
| GNFC | ₹539 | 13x | 10% | ₹7,892 Cr | ₹597 Cr | ₹7,921 Cr |
| GHCL | ₹607 | 9.7x | 24% | ₹3,183 Cr | ₹600 Cr | ₹5,831 Cr |
| Tanfac | ₹4,480 | 50.7x | 41.6% | ₹557 Cr | ₹88 Cr | ₹4,469 Cr |
Tanfac is the smallcap that thinks it’s a megacap.
12. Miscellaneous – Shareholding, Promoters
- Promoters: 51.82% (unchanged for 2 years)
- Public: ~47.6%
- DIIs: Creeping in—0.42%
- Recent Events: Loss of MD, DII interest rising, capex cycle peaking
Fun Fact: The number of shareholders jumped from 14,000 → 18,000 in one year. The street’s watching.
13. EduInvesting Verdict™
Tanfac is the overachiever that bulked up in silence and showed up at the chemical olympics with a six-pack made of HF.
- Pros: ROCE god, debt-light, capex monster, multi-product fluorine play.
- Cons: High valuation, small size = risk of overpricing and underdelivering.
If chemicals had a stock market influencer, this would be it.
Not everyone’s cup of acid—but for those who sip carefully, the compound interest hits just right.
Metadata
– Written by EduInvesting Analyst | 13 July 2025
– Tags: Tanfac Industries, Specialty Chemicals, Hydrofluoric Acid, High ROCE, Smallcap Stars, Capex Play, EduInvesting Premium
