Fluoropolymers, which has seen its stock rise 274 percent this year, is in a great position.
ICICI Securities claimed that demand for the polymer is expanding due to its use in new-age verticals including batteries, solar panels, and green hydrogen. https://share-market.in
According to the brokerage, the company is selling at a P/E multiple of 20 times FY24, compared to Navin Fluorine’s 42.1 times and SRF’s 27.5 times. Over the course of FY21-FY24, Gujarat Fluorochemicals’ earnings are predicted to expand at a compound annual rate of 45.9 percent on a low base, and the post-tax return on capital employed (RoCE) (post-tax) is expected to increase from 6.7 percent to 18 percent.
ICICI Securities noted that Gujarat Fluorochemicals is in the midst of growing its capacity in fluoropolymers, which provides a clearer picture of the company’s future growth.
A type of plastic resin, fluoropolymers, is made of fluorine-carbon linkages. Compared to hydrogen-carbon bonds, these bonds are stronger and more stable. Non-stick cookware, lithium-ion battery packaging, and wire insulation are just a few examples of their many applications.
As a result of this expansion, Gujarat Fluorochemicals will be able to extend its market and provide a more sustainable growth path for the company.
In 2007, Gujarat Fluorochemicals (GFL) introduced polytetrafluoroethylene to the fluoropolymer market (PTFE). PTFE, FKM, PFA, PVDF, additives, and many other fluoropolymers have been added to the company’s product line during the past 14 years.
Fluoropolymers (33.9% growth) and fluoro specialties (21.6%) are expected to fuel Gujarat Fluorochemicals’ revenue growth over FY21-FY24, according to ICICI Securities (23.8 percent). It predicted a 39.5% increase in the company’s Ebitda to Rs 1,830 crore within that time period. The company’s annual net profit is projected to climb by 45.9% compounded, to Rs 1,130 crore.