Gujarat Fluoroch

Gujarat Fluorochemicals Limited reported a strong Q4 FY26, with its chemicals business achieving a revenue of ₹1,358 crores, marking an 11% year-on-year growth. EBITDA for the quarter increased by 13% year-on-year to ₹353 crores, and Profit After Tax (PAT) grew 5% year-on-year to ₹169 crores. This performance was achieved despite a highly volatile global operating environment throughout FY26.

The Fluoropolymers segment delivered a strong performance, with revenues growing 19% year-on-year and 14% quarter-on-quarter to ₹848 crores in Q4 FY26. This growth was primarily driven by value-added products and higher volumes across key product categories. The company's focus on high-value specialty grades, deeper customer engagement, and expanding global reach continued to support this momentum. Management expects a growth of 15% to 20% in fluoropolymers for the current year and next couple of years, with existing capacities reaching optimal utilization.

The company has earmarked a significant capital expenditure of ₹3,150 crores for FY27 to fuel its growth journey. Of this, ₹2,300 crores is allocated for GFCL EV products, and ₹850 crores for GFL's chemical business. The GFL capex includes approximately ₹150 crores for refrigerant gas and related infrastructure, ₹222 crores for high-purity electronic specialty chemicals for the semiconductor sector, ₹250 crores for new fluoropolymer capacities, and ₹230 crores for backward integration and annual maintenance. The ₹2,300 crores for EV is part of a larger ₹6,000 crores cumulative capex planned for GFCL EV by FY28, with full earnings potential expected by FY29.

The battery materials segment is at an important inflection point, with all initial capacities under Phase 1 now commissioned and contracted. The LiPF6 salt has received approvals from most major global electrolyte players, and commercial sales are scaling up. For LFP, initial samples are approved, with final qualification expected by Q3 FY27, after which commercial supply will commence. The company is also expanding into natural graphite anode, which will enable it to address nearly 70% of the LFP battery cell value, positioning it as a highly integrated player. The segment experienced increased losses in Q4 FY26 due to the capitalization of the LiPF6 plant and a one-time^📎 M2M foreign currency loss, which management clarified as startup costs and now hedged.

Production and sales of R-32 commenced in March 2026, strengthening the company's refrigerant portfolio. The current capacity is over 10,000 tons and is expected to ramp up to 20,000 tons over time. Demand for refrigerants is anticipated to remain healthy, driven by increasing penetration of residential air conditioning, commercial refrigeration, cold chain infrastructure, and cooling infrastructure for AI data centers. The company has existing contracts and is confident in selling the increased R-32 volumes.

The company successfully navigated a highly volatile global operating environment in FY26, marked by geopolitical tensions, trade dynamics, and energy price fluctuations. Management's focus on disciplined execution, operational excellence, supply chain optimization, and stringent cost management helped maintain agility and resilience. However, inventory days continued to move up, leading to a high working capital cycle. This was attributed to an exceptional prior year turnover, the company's distribution model requiring insurance stock and long transit times, and the procurement of inventory for the new EV business, with expectations for reduction as EV operations stabilize.