I have trimmed my position in GFL in last few weeks and the key reasons are as follows:
Until Q1 it was generally the commodity side of the business that got impacted but now I see that pressure has started building in the FP business as well. I still believe GFL is one of the best chemical businesses in India with very little domestic/Chinese competition but the general slowdown in Europe has started impacting it and the recovery could take a few quarters.
There is also a possibility that I could be wrong in trimming my position since some parts of the business like Caustic/Chloromethane etc. have started bouncing back and company’s EV plans (LiPF6, LFP) etc. are just around the corner. One can expect US to release CFC quotas in Q3 for ref gases and that business too can pick up and also with Pharma picking up FSC performance may also pick up.
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