Gujarat Fluorochemicals Ltd Q1 FY26: ₹184 Cr Profit, 69x P/E, Gas Leaks & Global Ambitions
1. At a Glance
Gujarat Fluorochemicals (GFL) — the INOX Group’s chemical powerhouse — posted ₹184 Cr quarterly profit, up 70% YoY, on revenues of ₹1,281 Cr. Yet the market values it at ₹42,700 Cr with a P/E of 69. That’s startup-style valuation for a 90-year-old group that still suffers factory gas leaks.
2. Introduction
Think of GFL as India’s bridge to the high-end fluoropolymer universe. It makes the kind of stuff that goes into EV batteries, solar panels, non-stick pans, and even space suits. Basically, if it has “fluoro” in the name, they probably sell it.
But life is not just PTFE and Teflon shine. Last year, a gas leak at its Ranjitnagar plant killed one and injured many — proving that handling fluorochemicals is not the same as handling fevicol. Add to that customs duty disputes worth ₹30 Cr+, a string of director resignations, and promoter stake slowly trickling down (63% → 62.6%), and you realise this company isn’t just exporting polymers, it’s also exporting boardroom drama.
Investors meanwhile are still glued like epoxy — despite ROE slipping to 8% and EV/EBITDA at 34x. Why? Because specialty chemical FOMO is stronger than governance fear.
3. Business Model – WTF Do They Even Do?
Fluoropolymers: PTFE, FEP, PFA, PVDF — alphabet soup that makes coatings, cables, semiconductors, and EV batteries work. GFL is among the top five global producers.
Fluoro-specialities & Refrigerants: Chemicals used in pharma, agrochem, and air-conditioning gases.
Chemicals: Basic building blocks like caustic soda and chloro-methanes.
Global Exports: Europe, US, Japan — 50%+ sales abroad.
It’s a high-moat business — but also high-risk. If demand for EV batteries explodes, GFL wins. If regulators ban fluoropolymers for being “forever chemicals,” GFL could be in forever trouble.
Reader question: Would you rather bet on a company that sells EV chemicals or one that sells EV scooters? Which one feels less likely to catch fire?
4. Financials Overview
Source table
Metric
Latest Qtr (Q1 FY26)
YoY Qtr (Q1 FY25)
Prev Qtr (Q4 FY25)
YoY %
QoQ %
Revenue (₹Cr)
1,281
1,176
1,225
+8.9%
+4.6%
EBITDA (₹Cr)
344 (26.9%)
262 (22%)
306 (25%)
+31%
+12%
PAT (₹Cr)
184
108
191
+70%
-3.7%
EPS (₹)
16.8
9.8
17.4
+71%
-3.4%
Commentary: Strong YoY growth, but PAT is still below FY22’s peak levels. Annualised EPS ~₹67 → P/E ~58x.
5. Valuation Discussion – Fair Value Range
P/E Method: EPS = ₹56.6. Industry average P/E ~35. Range = 35–45× EPS = ₹1,980 – ₹2,550.
EV/EBITDA Method: EV = ₹44,580 Cr. FY25 EBITDA = ₹1,239 Cr. EV/EBITDA = 34× vs industry 14–18. Fair EV range = 14–18× = ₹17,350 – ₹22,300 Cr → Equity value per share ~₹1,550 – ₹1,990.
DCF (simplified): Assume 12% PAT CAGR, discount 12%, terminal 4%. Value ~₹2,100 – ₹2,400.
