Gujarat Fluorochemicals Q2 Results: Profit Tumbles 85%

Gujarat Fluorochemicals Ltd.'s profit declined in the second quarter of fiscal 2024.

The company's net profit fell 85% year-on-year to Rs 52.7 crore in the quarter ended September, according to an exchange filing on Friday. This compares with a Bloomberg estimate of Rs 150.83 crore.

• Revenue down 35.2% at Rs 947 crore vs Rs 1,461 crore (Bloomberg estimate: Rs 1,107.3 crore).

• Ebitda down 69.4% at Rs 164 crore vs Rs 535 crore (Bloomberg estimate: Rs 255.7 crore).

• Margin at 17.31% vs 36.61% (Bloomberg estimate: 23.10%).

• Reported profit down 85.2% at Rs 52.7 crore vs Rs 357.2 crore (Bloomberg estimate: Rs 150.83 crore).

• Revenue from this segment decreased 38% YoY.

• Volume has improved marginally over the previous quarter.

• Caustic soda/MDC prices were impacted further during the quarter but are expected to have bottomed out.

• The segment is expected to perform better in second half as compared with the first half of the fiscal.

• Revenue from this segment decreased 53% YoY.

• Volume and prices have been impacted significantly on account of drop in R125 exports to U.S. and also due to poor season in domestic market.

• Specialty chemical continues to be sluggish and Chinese dumping, particularly in this segment, to continue impacting both revenue and margin.

• Refrigerant gas volume expected to improve going forward, but may remain subdued as compared with FY23 due to impact of phasing out in U.S. and aggressive Chinese pricing.

• Revenue from this segment decreased 25% YoY.

• Fluoropolymers performance was impacted due to two factors. Commodity and lower-end grades of PTFE, where prices saw a sharp decline due to Chinese dumping. Secondly, due to continued destocking in higher-end grades, and headwinds due to sluggishness in demand, particularly in Europe.

• H2 FY24 is expected to be better as compared to H1 FY24 primarily due to expected phasing out of destocking, pickup in demand in U.S. and positive impact of exit of legacy players.

• Company has been working on optimising product mix for entire fluoropolymer segment to move to higher-end grades. This is expected to yield better results starting H2 FY24.

• Additional fluoropolymer capacities that were recently set up are expected to result in continued increase in sales over the subsequent quarters.

• Sunrise sectors such as EV, green hydrogen, semiconductors and solar among others to contribute to further increase in demand for various fluoropolymers.

Shares of the company closed 2.21% higher at Rs 2,780 apiece before the results were announced, as compared with a rise of 0.51% in the benchmark NSE Nifty 50 on Friday.