1. At a Glance
Tanfac isn’t selling toothpaste or fertilizer. It’s selling the stuff that makes the stuff—fluorine-based chemicals powering everything from semiconductors to air conditioners. With margins that sting harder than hydrofluoric acid, this chemical underdog is punching well above its ₹4,500 Cr market cap.
2. Introduction with Hook
If Breaking Bad was made in India, Walter White would’ve worked at Tanfac Industries. This company makes hydrofluoric acid—a compound so nasty it dissolves glass and profits.
- ROCE: 41.6% (yes, you read that right)
- Profit CAGR (5Y): 39%
- Stock up 90% in the last year
From a 2018 afterthought to a 2025 fluorine fortress, this 50-year-old relic just got its groove back.
3. Business Model (WTF Do They Even Do?)
Tanfac is one of India’s leading manufacturers of inorganic fluorine-based chemicals—the building blocks for:
- Pharma intermediates
- Agrochemicals
- Refrigerants
- Aluminium smelting
- Electronic-grade applications
Their core includes:
- Anhydrous Hydrofluoric Acid (AHF)
- Aluminium Fluoride
- Potassium Bifluoride
- Sulphuric Acid, Oleum
- Peracetic Acid, Boron Trifluoride Complexes
These aren’t FMCG-style quarterly storylines. These are B2B high-purity chemical stories, with steady demand and (usually) fat margins.
4. Financials Overview
Let’s chemically break it down:
| Year | Revenue (₹ Cr) | PAT (₹ Cr) | OPM | ROE | ROCE |
|---|---|---|---|---|---|
| FY22 | 320 | 53 | 24% | 53% | 67% |
| FY23 | 375 | 56 | 20% | 56% | 48% |
| FY24 | 378 | 52 | 19% | 53% | 33% |
| FY25 (TTM) | 638 | 96 | 22% | 33% | 42% |
Growth is real. Margins are stable. FY25 showed a 74% revenue surge. What’s the catch? Raw material volatility and increased working capital.
5. Valuation
At ₹4,583/share:
- P/E: ~47.5
- Book Value: ₹313
- CMP/BV: 14.65x
- Dividend Yield: 0.15% (stingier than your hostel mess warden)
📏 Fair Value Range Estimate:
- DCF & earnings-based: ₹3,700 – ₹4,300
- Multiple-based (30–35x sustainable EPS of ₹90): ₹2,700 – ₹3,150
- Premium scarcity valuation (fluorine peer): ₹3,800 – ₹4,800
Stock trades at a premium—and not without reason. But expectations are hotter than a Teflon reactor.
6. What’s Cooking – News, Triggers, Drama
- New CEO alert: Mr. Hemango Gupta appointed
- Q1 FY26 PAT at ₹19 Cr (flat YoY)
- Capex in motion: ₹100+ Cr toward capacity expansion
- FII entry begins: tiny nibble at 0.14% in Mar ’25
- AGM on Sept 25 could reveal roadmap: fluorospecialty expansions?
Triggers:
- Entry into battery chemicals (LiPF6 base)
- Tie-ups for semiconductor-grade fluoride
- Capex completion
7. Balance Sheet
| Metric (₹ Cr) | FY25 |
|---|---|
| Net Worth | ₹312 |
| Borrowings | ₹41 |
| Total Assets | ₹426 |
| Fixed Assets | ₹168 |
| CWIP | ₹8 |
| Investments | ₹9 |
Key takeaways:
- Debt-light
- Reserves tripled in 3 years
- Fixed asset jump = new projects brewing
- Working capital creeping up
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY25 | ₹33 Cr | -₹42 Cr | ₹32 Cr | ₹23 Cr |
| FY24 | ₹34 Cr | -₹30 Cr | -₹7 Cr | -₹3 Cr |
| FY23 | ₹43 Cr | -₹40 Cr | -₹6 Cr | -₹3 Cr |
Observations:
- Solid operational cash flow
- Investment cash outflows = expansion mode
- FY25 financing inflow = possibly a loan for capex
Cash cushion still okay. Fluorine fumes haven’t burned a hole… yet.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 41.6% |
| ROE | 32.5% |
| Debtor Days | 65 |
| Inventory Days | 108 |
| CCC | 126 |
| WC Days | 93 |
Interpretation:
- ROCE sizzling hot
- But CCC stretched (hello, longer inventory cycles)
- Working capital is the one canary in this chemical coal mine
10. P&L Breakdown – Show Me the Money
| FY | Sales | OPM | PAT | EPS |
|---|---|---|---|---|
| FY23 | ₹375 Cr | 20% | ₹56 Cr | ₹56.3 |
| FY24 | ₹378 Cr | 19% | ₹52 Cr | ₹52.6 |
| FY25 (TTM) | ₹638 Cr | 22% | ₹96 Cr | ₹96.4 |
FY25 is the breakout year. But can that TTM performance hold?
11. Peer Comparison
| Company | P/E | ROCE | ROE | OPM | M-Cap |
|---|---|---|---|---|---|
| Tanfac | 47.5 | 41.6% | 32.5% | 22% | ₹4,572 Cr |
| Deepak Fert | 21.4 | 16% | 16% | 19% | ₹20,009 Cr |
| GNFC | 13.5 | 9.6% | 7% | 7.8% | ₹8,062 Cr |
| SRF | 75.9 | 12.3% | 10.4% | 18.5% | ₹94,814 Cr |
Verdict:
Tanfac is a margin and return monster. But price-wise? It’s already behaving like it owns the fluorine periodic table.
12. Miscellaneous – Shareholding, Promoters
| Shareholder | % (Mar 2025) |
|---|---|
| Promoters | 51.82% |
| FIIs | 0.14% |
| DIIs | 0.42% |
| Public | 47.62% |
| Shareholders | 18,000+ |
- Promoter stake rock steady
- Slowly growing institutional interest
- Retail loves it: 3,000 new shareholders in 12 months
13. EduInvesting Verdict™
Tanfac’s past reads like a B-grade villain arc—ignored, underutilized, and nearly insolvent. Now? It’s the rare specialty chemical player with real moat, real growth, real returns—and the market’s finally paying attention.
But at 14.6x book value and 47x earnings, the stock is priced like it’s going to Mars on a rocket fueled by hydrofluoric acid. Great business, hot valuation. If execution on expansion slips or margins compress, it’ll sting harder than their products.
Still, the chemistry is undeniable. As long as they don’t fumble the beaker, Tanfac’s formula is explosive—in the good way.
Metadata
– Written by EduInvesting Research | 16 July 2025
– Tags: Tanfac, Fluorochemicals, Specialty Chemicals, ROCE Kings, Capex, High Growth Midcap
