Stallion India

Stallion India Fluorochemicals Ltd. reported strong financial results for Q2 and H1 FY26. Q2 FY26 total revenues reached INR 105.75 crores, marking a 55.6% YoY growth. EBITDA for the quarter surged nearly seven-fold to INR 15.77 crores, with margins expanding to 14.9%, and PAT increased impressively to INR 11.42 crores. For the first half of FY26, total revenue was INR 216.3 crores (52.8% YoY growth), EBITDA almost doubled to INR 13.14 crores, and PAT increased by 135% to INR 21.78 crores. The company has already achieved over 50% of its full-year revenue guidance of INR 430 crores.

The company is pursuing a strategic integration roadmap, including a 10,000 metric ton R32 manufacturing facility in Bhilwara, Rajasthan, to provide backward integration and control over critical raw materials. This initiative aims to enhance cost competitiveness and supply reliability. Additionally, the upcoming Mambattu facility in Andhra Pradesh will boost blending and debulking capacity for HFO refrigerants and specialty gases, while also adding semiconductor and helium-processing capabilities. These efforts are expected to enhance operating margins by 3-4% and contribute to a targeted 30-35% CAGR growth over the next three years.

Several capacity expansion projects are underway. The Khalapur plant is expected to be operational by December end or January max, following a complete redesign to upgrade to 300 bar systems. The Mambattu facility, after facing severe flooding and a 2.5x enhancement, is now projected to be operational by January end. The Bhilwara R32 plant, requiring a minimum CapEx of INR 200 crores, is being funded through internal accruals and is targeted for operational readiness by July 2026. Management noted that the initial phase of Bhilwara focuses solely on R32 manufacturing to compress the timeline from 18 to 9 months.

The upcoming HFC quota system, expected by 2028, will be based on baseline years 2024-2026. Management confirmed that these quotas will be tradable, both within and outside India, creating a potential monetization opportunity. They also highlighted that current Indian R32 manufacturing capacity (30-40k tonnes) significantly exceeds domestic demand (16-18k tonnes), making exports a crucial component for profitability. The government's policy aims to shift the industry towards lower Global Warming Potential (GWP) products, which the company is aligning with through HFO blends.

The company is expanding its footprint in liquid helium and high-purity semiconductor gases, targeting India's emerging electronic, solar, and fiber optic industries. Helium, a natural product, requires specialized refining and handling in liquid form at -257°C, with stringent purity requirements (e.g., 6N for semiconductors). Stallion is upgrading its Khalapur plant to handle 300 bar systems, aligning with the highest industry standards. The semiconductor segment, despite a long 2-3 year approval process, is viewed as highly profitable with significant growth potential due to India's self-reliance push.

Stallion is confident in achieving its FY26 growth targets, with H2 traditionally being a stronger period. The Bhilwara R32 plant is projected to achieve peak revenues of INR 500-700 crores with a PAT margin of 22-24%. The helium business is expected to generate a PAT level of 16-18%. Overall, with the new capacities and backward integration, the company anticipates next year's revenue to be around INR 850 crores with margins increasing to 22-24%. Management emphasized a focus on sustainable, long-term growth and maximizing return on investment.