SRF Limited

Comparison of big 5 – SRF, Gujarat Fluorochemicals (GFCL), Deepak Nitrite, Tata Chemicals and Navin Fluorine

Capex remains high across all big 5

1. GFCL (Gujarat Fluorochemicals Limited) is investing significantly in fluoropolymers and expects substantial contributions from this segment starting from FY25. The company plans to invest around ₹1,000 – ₹1,500 crore annually in FY22-24.
2. SRF is set to operationalize its first line of fluoropolymers in the second half of FY24. The company also aims to add new dedicated lines for advanced intermediaries in the agrochemical and pharmaceutical sectors, along with new-age products.
3. Navin Fluorine International expects increased productivity from its existing plants and plans to expand further. They anticipate higher demand for their products, including refrigerant gases.
4. Deepak Nitrite intends to invest ₹2,500 crore over the next three years, focusing on improving its phenols business and downstream applications through backward integration.
5. Tata Chemicals plans a ₹2,000 crore capex for the next three years to enhance capacities in soda ash, sodium bicarbonate, and silica. They aim to capitalize on the growth potential of solar energy, electric vehicles, and fuel cells.
6. The valuation range of the specialty chemicals sector varies widely, from 23 to 46 times FY24 earnings, excluding Tata Chemicals. The sector trades at higher multiples due to ongoing capex plans.