Stallion India Fluorochemicals Limited — Q2 FY26 earnings call

Call held 16 Oct 2025

Management summary

Stallion India Fluorochemicals Ltd. reported robust Q2 and H1 FY26 results, with significant YoY growth in revenue, EBITDA, and PAT, exceeding 50% of its full-year revenue guidance. The company is making strategic progress on backward integration and capacity expansion with new facilities for R32 manufacturing and HFO refrigerants, despite a challenging macroeconomic environment and cyclical product markets. Management expressed confidence in achieving growth targets and expanding margins through these initiatives.

Highlights

  • Q2 FY26 revenue grew 55.6% YoY to INR 105.75 crores, driven by higher volumes, improved product mix, and strong demand.

  • Q2 FY26 EBITDA surged nearly seven-fold to INR 15.77 crores with margins expanding to 14.9%.

  • H1 FY26 revenue grew 52.8% YoY to INR 216.3 crores, with PAT increasing by 135% to INR 21.78 crores.

  • Achieved over 50% of full-year revenue guidance of INR 430 crores within the first half, demonstrating strong operational leverage.

  • Strategic progress on backward integration with new R32 manufacturing facility in Bhilwara and enhanced Mambattu facility for HFO refrigerants and specialty gases.

Concerns

  • Challenging macroeconomic backdrop characterized by global tariff-related headwinds and cyclical slowdown in certain sectors.

  • Helium is a cyclical product, with prices fluctuating significantly (e.g., INR 1,200 today vs. INR 4,800 three years ago).

  • R32 manufacturing capacity in India is currently in excess of domestic demand, making exports the profitable segment for this product.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹105.75 Cr
    YoY +55.6%
  • EBITDA
    ₹15.77 Cr
    YoY +600%
  • EBITDA Margin
    14.9%
  • PAT
    ₹11.42 Cr

H1 FY26

  • Revenue
    ₹216.3 Cr
    YoY +52.8%
  • PAT
    ₹21.78 Cr
    YoY +135%

What they filed

Q1 FY27: revenue up 10.0%, net profit up 90.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue68 85 152 110 106 +56%105 +24%110 −28%121 +10%
EBITDA2 14 19 14 16 +700%12 −14%16 −16%22 +57%
Net profit1 10 13 10 11 +1000%11 +10%11 −15%19 +90%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹50 Cr Bhilwara project funded by internal accruals; enhanced Mambattu and Khalapur projects funded by internal accruals.
    • Mambattu plant (HFO refrigerants, specialty gases, semiconductor) ₹20 Cr
    • Khalapur plant (helium, semiconductor) ₹30 Cr
    • Bhilwara plant (R32 manufacturing) ₹200 Cr
    • Future AHF/MDC backward integration ₹450 Cr
    • Future HFO backward integration ₹500 Cr
    Our 10,000 metric ton R32 manufacturing facility in Bhilwara, Rajasthan, currently under development... The work has been started. Most of the ordering and contracting and everything has been done. It's all been done by the company's internal accruals. (Page 3, 22)
  • Liquidity Liquidity disclosed Company has sufficient internal funds for smaller CapEx requirements like the Bhilwara project.
    See, now the company is showing INR 40 crore PAT and INR 20 crore PAT. So, the money is there now with the company. So, everything why do we have to run to the market and us. So, smaller requirements like now the Bhilwara, the land that we have gone ahead, we have purchased, the basic work, the basic contracting that we needed to do to start moving the processes on. We have already invested in that. We have not come to the market for that.

Guidance & targets

Revenue

  • Full-year Revenue Revenue · FY26 · High confidence INR 430 crores
    We have already achieved over 50% of our full-year revenue guidance of INR 430 crores within the first half year.

    — Shazad Rustomji, Chairman & Managing Director

  • CAGR Growth Revenue · Next three years · High confidence 30-35%
    We continue to target a 30%, 35% CAGR growth over the next three years, supported by backward and forward integration initiatives expected to enhance operating margins by 3% to 4%.

    — Shazad Rustomji, Chairman & Managing Director

  • Bhilwara Plant Revenue (Initial 6 months) Revenue · First 6 months of operation (starting July 1) · High confidence INR 250 crores
    If we start on July 1, as we have targeted, it would be about INR 250 crores. A 6-month turnover would be INR 250 crores.

    — Shazad Rustomji, Chairman & Managing Director

  • Bhilwara Plant Revenue (Full Year) Revenue · YoY by 2028 · High confidence INR 500-700 crores
    At the minimal, at the worst case figure is INR 500 crores. And a sensible figure YoY by 2028, it should be INR 700 crores.

    — Shazad Rustomji, Chairman & Managing Director

  • Helium Business Revenue (Initial Year) Revenue · Starting year · High confidence INR 50 crores
    Now, the helium part would be like INR 50 crores is what we would look at the starting year, the first year.

    — Shazad Rustomji, Chairman & Managing Director

  • Mambattu Plant Revenue (Initial Year) Revenue · Starting year · High confidence INR 50 crores
    Same way with the Mambattu, we would be looking at INR 50 crores as the starting year.

    — Shazad Rustomji, Chairman & Managing Director

  • Current Business Revenue Revenue · Next year · High confidence INR 500 crores
    Next year, the target would be INR 500 crores for this.

    — Shazad Rustomji, Chairman & Managing Director

Profitability

  • Operating Margins Expansion Profitability · Next three years · High confidence 3-4%
    supported by backward and forward integration initiatives expected to enhance operating margins by 3% to 4%.

    — Shazad Rustomji, Chairman & Managing Director

  • Bhilwara Plant PAT Margin Profitability · When manufacturing at full scale · High confidence 24%
    24%.

    — Shazad Rustomji, Chairman & Managing Director

  • Helium Business PAT Margin Profitability · High confidence 16-18%
    The helium would generate between 16% to 18%, which averaged out would raise our PAT up.

    — Shazad Rustomji, Chairman & Managing Director

What to watch in Q3 FY26

Khalapur Plant Operationalization

December end or January max
Current Construction almost over, fit-out starting
Target Operational

Why it matters

This plant is part of the IPO-outlined CapEx and will contribute to helium and semiconductor gases, impacting future revenue and margins.

Basically, we would expect that by December end, we should be operational in the Khalapur facility.

Risks & concerns

  • Macroeconomic Headwinds

    medium

    Global tariff-related headwinds and cyclical slowdown in certain sectors.

    Management acknowledged

  • Helium Price Cyclicality

    medium

    Helium prices are subject to cyclical downturns, but a diversified product portfolio helps balance this.

    Management acknowledged

  • R32 Overcapacity in India

    medium

    Indian R32 manufacturing capacity exceeds domestic demand, necessitating a focus on exports for profitability.

    Management acknowledged

  • Raw Material Supply Chain Dependence

    low

    Potential for sanctions from Chinese government on raw material supply, though currently no issue, company is diversifying sources.

    Analyst acknowledged

  • Project Delays due to Natural Calamities

    low

    Severe flooding at the Mambattu facility caused a three-month delay, but work has resumed and is on track.

    Management acknowledged

Q&A highlights

7 direct
Raw Material Sourcing and China Dependence Direct
Not currently. Currently, we're not manufacturing. But onwards, when we move into manufacturing, fluorospar would be one of the raw materials. We import from a mix of places. We import from Japan. We import from China. We import from Middle-East also now, and we import from the U.S. and Europe, it is a mix. We've been moving away. But to answer your question, the majority part, 80%, 85% of the fluorochemical industry operates from China. So directly, indirectly, you would be working with China.

Clarifies the company's current and future raw material strategy, including efforts to diversify away from China, which is a key supply chain risk.

Asked by Shreya Masalia

Refrigeration Quota System and Tradability Direct
The quota system that will come in 2028 is not decided or the modalities have not been laid out by the government. In 2027, the government will fit, formulate and arrive at what is the best system for India... Second is, is this quotas tradable? Yes, these quotas will all be tradable.

Explains the future regulatory framework for refrigerants, highlighting the potential for tradable quotas to create significant value and influence industry structure for companies like Stallion.

Asked by Prasad Vadnere

Helium Gas Processing and Competitive Advantage Direct
Helium. basically, helium is a natural product. Nobody manufactures it... So, you have to refine it... Now, handling all these cryogenics and handling and refilling it in liquid, again, same similar containers, vacuum containers, etc., transporting it to where the end uses... And the third most important thing is your capability of upgrading. Now till now, in India, it was 200 bar pressure helium that was handled... your same cylinder that you are supplying 7 cubic meters will now supply 12 cubic meters. So, your transport costs will come down literally 50% of what it costs somebody else. This is what gives you the cutting edge.

Provides a detailed technical explanation of helium processing, emphasizing the specialized knowledge, infrastructure, and cost advantages (e.g., 50% transport cost reduction) that differentiate Stallion in this market.

Asked by Ranvir Singh

HFC Production Baseline and Quota Acquisition Partial
One is having production during the baseline period. There are other ways also in which you can do. Like, one, we have said the quotas are tradable. Number two, more than tradable, there are processes in which you would be able to get the quota. Number one, the government has not laid down its policy of how it's going to grant what it's going to be doing.

Addresses concerns about establishing an HFC production baseline, indicating that the company has strategic methods beyond direct production during the baseline period to secure quotas, implying proprietary knowledge.

Asked by Nitesh Dhoot

Rationale for Semiconductor Gases and Backward Integration Direct
It is 35 years in the business, 35 years of knowledge, 35 years of wanting to grow in each field... R32 will also be around in the Indian industry for the next 20. So, if you do not have a critical raw material like R32, you will not be a very strong or big player moving ahead... So, it gives us control over the basic raw material... Our Prime Minister has led India down the path of semiconductor self-reliance... It's also a very profitable segment.

Outlines the strategic long-term vision for entering high-margin semiconductor gases and the critical role of backward integration in securing raw material control and aligning with national self-reliance initiatives.

Asked by Yogesh Soni

Semiconductor Gas Qualification Process and Barriers to Entry Direct
So, you cannot just walk in and sell to a semiconductor manufacturer... The process, you have to get approved. So, you have to go through that whole two-year, three-year process of approvals, of verification, of your reliability, etc. Then, it's not just Tata. Basically, they would have a tie up global. So, the global partner has to approve you. So, there's a validation process that is there.

Highlights the stringent and lengthy (2-3 year) qualification process required for semiconductor gases, which acts as a significant barrier to entry and ensures pricing power for approved suppliers.

Asked by Ashish Soni

Capacity Utilization in Non-Manufacturing vs. Manufacturing Direct
But technically, in a non-manufacturing activity, you cannot speak on capacity... Now, this significantly changes when you move into like a manufacturing of a molecule like R32... your plant CapEx, your plant running costs, your plant everything depends on how much of this 10,000 tonnes you manage to produce and sell. Now, in a 10,000-tonne plant, if I sell 5,000 tonnes, I'll go into loss.

Clarifies the distinction between capacity metrics for trading/handling vs. manufacturing, explaining why utilization figures are inherently different and how manufacturing requires high utilization for profitability.

Asked by Devansh Tandon

R32 Demand-Supply Dynamics and China's Influence Direct
R32, current requirement in India is anywhere meaning the figures are not absolutely perfect. The requirement is anywhere between 16,000 to 18,000 metric tonnes. The manufacturing capacities in India are much in excess of this... So majorly, your profitable segment is not sale in India, it is exports... The demand-supply scenario, what you're asking, currently, technically, let's put it this way, China is a driver of the pricing.

Provides a comprehensive overview of the R32 market, emphasizing the current overcapacity in India, the importance of exports, and China's dominant role in global pricing.

Asked by Devansh Tandon

3 min read 6 chapters

Detailed narrative

Robust Q2 and H1 FY26 Performance

Stallion India Fluorochemicals Ltd. delivered strong financial results for Q2 FY26, with total revenues reaching INR 105.75 crores, marking a 55.6% YoY growth. EBITDA surged nearly seven-fold to INR 15.77 crores, and PAT increased to INR 11.42 crores, with margins expanding to 14.9%. For the first half of FY26, total revenue was INR 216.3 crores (52.8% YoY growth), 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.

Strategic Capacity Expansion and Backward Integration

The company is aggressively pursuing backward integration and capacity expansion. The 10,000 metric ton R32 manufacturing facility in Bhilwara, Rajasthan, is under development with a minimum CapEx of INR 200 crores, aiming for operationalization within 9 months (by July 2026). The Mambattu facility in Andhra Pradesh, initially planned with INR 20 crores CapEx, has been enhanced 2.5 times to increase blending and debulking capacity for HFO refrigerants and specialty gases, targeting operationalization by January end. The Khalapur facility, with an IPO-outlined CapEx of INR 30 crores, is expected to be operational by December end or January max.

Entry into High-Purity Semiconductor Gases

Stallion is expanding its Khalapur facility to strengthen its footprint in liquid helium and high-purity semiconductor gases, targeting India's emerging electronic, solar, and fiber optic industries. The company aims for 6N purity (99.999999%) helium, requiring specialized handling, testing capabilities, and cylinder conditioning. The approval process for semiconductor gases is rigorous, taking 2-3 years, but creates a significant competitive moat and pricing power once qualified. This move aligns with the Prime Minister's push for semiconductor self-reliance.

Refrigerant Quota System and Market Dynamics

The upcoming refrigeration quota system (Kigali Accord) for 2028 will be based on baseline years (2024-2026) and will feature tradable quotas, guiding the industry towards lower Global Warming Potential (GWP) products like HFOs. While India's R32 manufacturing capacity currently exceeds domestic demand (16,000-18,000 metric tonnes demand vs. 30,000-40,000 tonnes capacity), the profitable segment is exports. Demand is expected to grow with the AC/refrigeration industry (15-20% YoY) and increasing use of R32 in HFO blends, with China's capacity reductions happening earlier than India's.

Margin Outlook and Cyclicality Management

The company expects significant margin expansion with backward integration. The Bhilwara R32 plant is projected to achieve a PAT margin of 24%, and the helium business 16-18%. While current business margins are optimal, the new manufacturing activities are expected to drive overall profitability. Management acknowledges the cyclical nature of products like helium but aims to balance this through a diversified product portfolio across the fluorochemical range, ensuring steady growth and mitigating demand cyclicality in end-user industries.

Funding Strategy and Internal Accruals

Stallion is funding its current expansion projects, including the Bhilwara R32 plant and the enhanced Mambattu and Khalapur facilities, primarily through internal accruals. Management emphasized that the company has sufficient funds from its current profitability (INR 40 crore PAT, INR 20 crore PAT) for these smaller requirements. They stated that they would approach the market for funding only when larger capital requirements, such as future AHF/MDC (INR 450-500 crores) or HFO (INR 500-700 crores) backward integration, arise.

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