1. At a Glance
From refrigerants to EV battery chemicals, Gujarat Fluorochemicals Ltd (GFL) has its fingers in every fluorine-flavored pie. It’s a specialty chem powerhouse, but recent margin erosion and capex-heavy expansions have left investors wondering: Is this stock a secret compounder or just vaporware?
2. Introduction with Hook
Imagine a molecular chemist trying to be a Formula E racer. That’s GFL — a chemical company speeding toward EV glory with PFAS-free brakes and fluoropolymer-fueled ambition.
- Market Cap: ₹37,932 Cr
- Revenue (FY25): ₹4,737 Cr
- Net Profit (FY25): ₹546 Cr
- Stock P/E: 69.5 — hotter than its PTFE reactor
- Export-heavy player with global clientele across EU, US, and Asia
But… is the hype more gaseous than solid?
3. Business Model (WTF Do They Even Do?)
GFL is the mad scientist of the INOX Group, with the following key segments:
1. Fluoropolymers (PTFE, PVDF, FEP etc.)
- Used in EV batteries, solar panels, semiconductors
- 25–30% of revenue
- Competing globally with Chemours & Daikin
2. Fluoro-Specialty Chemicals
- For pharma, agrochem, paints
- New product pipeline includes LiPF6 for EVs
3. Refrigerants (Legacy)
- R22, R32, etc. — slowly phasing out
- Drag on growth but still 15–20% of topline
4. Clean Energy Foray
- Capex into LiPF6, battery chemicals, and green hydrogen R&D
- Buzzword bingo winner
4. Financials Overview
| Metric | FY25 |
|---|---|
| Revenue | ₹4,737 Cr |
| EBITDA | ₹1,157 Cr |
| Net Profit | ₹546 Cr |
| OPM | 24% |
| ROCE | 9.88% |
| ROE | 8.28% |
Growth has been lumpy. Margins slid from 35% in FY23 to 24% in FY25, thanks to global demand pressures and cost inflation. Profit still grew 25% YoY in FY25 – but the golden margins? Gone with the wind (literally, if you use their refrigerants).
5. Valuation
- Stock P/E: 69.5
- P/B: 5.23
- Book Value: ₹660
- Dividend Yield: 0.09% (classic “we’re reinvesting” excuse)
Fair Value Range Estimate:
₹2,600 – ₹3,200
Current Price: ₹3,454 – cooked more than their fluorochemicals.
Valuation assumes a lot of EV revenue that hasn’t shown up yet.
6. What’s Cooking – News, Triggers, Drama
- Capex Plan ₹1,600 Cr – EV battery salts, fluoropolymers
- LiPF6 Project – ₹6,000 Cr mega play
- Q4 FY25 – Revenue up 8%, EBITDA up 28% QoQ
- Plant Incident (CMS-1) – Four fatalities in Dec 2024
- Demerger – Multiple subsidiary shuffles ongoing
- EV Unit Fundraise – ₹1,000 Cr by GFCL EV
- Rating – CRISIL AA+/Stable reaffirmed
GFL is juggling high growth and high risk — and the chemicals aren’t the only volatile element here.
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity | ₹11 |
| Reserves | ₹7,242 |
| Borrowings | ₹2,080 |
| Fixed Assets | ₹4,329 |
| CWIP | ₹1,524 |
| Investments | ₹290 |
| Other Assets | ₹4,466 |
| Total Assets | ₹10,609 |
🧪 Takeaways:
- Capex still mid-cycle – over ₹1,500 Cr in CWIP
- Borrowing under control for now
- Balance sheet is stable, but not debt-free
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹739 Cr | -₹476 Cr | -₹264 Cr | ₹-2 Cr |
| FY24 | ₹626 Cr | -₹966 Cr | ₹348 Cr | ₹7 Cr |
| FY25 | ₹545 Cr | -₹1,120 Cr | ₹599 Cr | ₹24 Cr |
Positive cash flows from ops, but burning through capex like a mad scientist with a time bomb.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 8.28% |
| ROCE | 9.88% |
| OPM | 24% |
| D/E | 0.29 |
| EPS | ₹49.70 |
| Debtor Days | 92 |
| Inventory Days | 449 |
| Cash Conversion | 392 (long AF) |
Verdict: Operating efficiency is down, inventory cycle is long, but leverage is low. We call this: Stressy with a side of Sexy.
10. P&L Breakdown – Show Me the Money
| Metric | FY25 |
|---|---|
| Revenue | ₹4,737 Cr |
| EBITDA | ₹1,157 Cr |
| Depreciation | ₹355 Cr |
| Interest | ₹147 Cr |
| PBT | ₹713 Cr |
| PAT | ₹546 Cr |
Margins are recovering post FY24 slump, but competition and pricing pressure still haunt every quarter.
11. Peer Comparison
| Company | P/E | ROCE | OPM | PAT (Cr) | Sales (Cr) |
|---|---|---|---|---|---|
| GFL | 69.5 | 9.9% | 24.4% | ₹546 | ₹4,737 |
| Deepak Nitrite | 38.6 | 16.6% | 13.2% | ₹697 | ₹8,282 |
| Navin Fluorine | 87.3 | 11.7% | 22.7% | ₹289 | ₹2,349 |
| Vinati Organics | 48.9 | 20.6% | 26.0% | ₹415 | ₹2,248 |
GFL’s valuation is… extra. Market is baking in EV upside like it’s guaranteed. Not baked, not even preheated.
12. Miscellaneous – Shareholding, Promoters
| Category | Stake |
|---|---|
| Promoters | 62.57% (down 3.5% in 3 yrs) |
| FIIs | 4.25% |
| DIIs | 11.47% (steadily rising) |
| Public | 21.7% |
| No. of Shareholders | 68,420 |
👀 Insider Signals: Promoter trimming + DII scooping = Mixed cocktail
13. EduInvesting Verdict™
GFL is India’s fluorine-forward hope. It’s well-placed in a niche oligopoly with massive export potential and strategic products. But here’s the zinger: margins have crashed, capex is exploding, and valuation has gone full Bollywood drama.
The business model is futuristic, but FY25 results are still playing catch-up. It’s a high-conviction story stock, but as of now, earnings don’t justify that molecular-level P/E.
⚗️ Hold your goggles — the next few quarters will decide if this turns into a compounding reaction or just fizzes out in capex vapor.
Metadata
– Written by EduInvesting Team | 15 July 2025
– Tags: Gujarat Fluorochemicals, Specialty Chemicals, EV Battery Chemicals, Fluoropolymers, Capex Heavy Stocks, Inox Group, PFAS-free, LiPF6, Chemical Stocks India
