Gujarat Fluorochemicals: A hidden fluorine story

Another subdued quarter with significant reduction in revenue, margins and profitability. Overall revenue down 35%, EBIDTA down 70% and PAT down 85% YoY.

Revenue for Fluorochemicals segment was hut most with decine of more than 50% YoY.

Bulk Chemicals: Caustic soda/MDC prices were impacted further during the quarter but expected to have bottomed out. Expecting better H2 as compared to H1

Fluorochemicals: Volume and prices are impacted significantly due to weak demand in US and domestic. China dumping resulting is significant lower price realisation. Ref Gas volumes are expected to improve going forward however may remain subdued compared to FY23 due to impact of phasing out in US and aggressive Chinese pricing.

Flouropolymers: China dumping, lower demand particularly in Europe and destocking resulted in significant impact on the Business. H2FY24 is expected to be better due to expected phasing out of destocking, pickup in the demand in US and positive impact of exit of legacy players.

Battery Chemicals: Expected to commission by 2024. Asset turnover expected to be 2x with capex of 600-800 cr. Margins expected be 30%

Outlook: H2FY24 expected to be better than H1FY23 with recovery in key segment of Fluoropolymers . FY25 is expected to be better than FY23. Margins expected to be 30%+ in FY25.

Market have not reacted very badly as it should had been due to sharp fall in all matrices. This may be due to FY2025 with revenue and profitability expected to be better than FY2023. Important to see sequencial recovery from Q3 onwards