Gujarat Fluorochemicals (FLUOROCHEM) Q2 24/25 earnings summary

Executive summary

• Consolidated revenue for Q2 FY25 was INR 1,188 crore, up 1% sequentially and 25% year-over-year.

• EBITDA rose to INR 295 crore, up 13% quarter-on-quarter and 80% year-over-year, with margins improving to 25% from 22% last quarter.

• PAT for Q2 FY25 stood at INR 121 crore, up 12% QoQ and 128% YoY, with PAT margin at 10%.

• Board approved a composite scheme of arrangement involving demerger and amalgamation, effective from 1 January 2025, subject to regulatory approvals.

• Raised INR 1,000 crore in GFCL EV at a valuation of INR 25,000 crore to fund CapEx for battery materials.

Financial highlights

• Revenue growth driven by improved performance in Bulk Chemicals and Fluoropolymers, with the latter showing strong year-over-year margin and mix improvement.

• EBITDA margin increased to 25% due to a shift toward higher value-added fluoropolymer products.

• Standalone revenue from operations for Q2 FY25 was INR 1,199 crore, up from INR 926 crore in Q2 FY24.

• Annual revenue and EBITDA have shown consistent growth over the last five years.

• CapEx intensity remains high, with cumulative CapEx guidance of INR 5,000 crore by FY27 and INR 6,000 crore by FY28 for the EV business.

Outlook and guidance

• Expecting significant improvement in profitability and margins from Q4 FY25 onwards, driven by higher capacity utilization and operating leverage.

• Fluoropolymer segment expects higher revenue and margins from FY26 due to legacy competitor exit and new grade approvals.

• Bulk Chemicals segment to benefit from rising caustic prices and full capacity utilization.

• Battery materials business poised for commercial ramp-up, with initial supplies expected from Q4 FY25.

• Composite scheme of arrangement and new subsidiaries in Oman and Germany to expand into EV and battery chemical segments.