Gujarat Fluorochemicals Limited

Basic Materials — Specialty Chemicals · NSE

₹4,380.00−₹132.50 (−2.94%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by negative free cash flow, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Gujarat Fluorochemicals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Gujarat Fluorochemicals Limited engages in the manufacture and trading of refrigerant gases, fluorochemicals, fluoropolymers, battery chemicals, wind energy, and renewable energy solutions in India, Europe, the United States, and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees3,142

Annual revenue₹4,875 Cr

How does it make money?

Turns over ₹4,875 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹26 left at the operating level before interest, tax and depreciation. Each of its 3,142 employees supports ₹1.55 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin26.5%

Net margin11.8%

Revenue / employee₹1.55 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?Little sign of one

Returns on capital of 9.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE9.6%

ROE7.3%

Peer median ROE22.3%

What is the outlook?

14 analysts covering the stock expect revenue to grow about 36.6% and earnings to grow about 28.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+36.6%

Est. earnings growth+28.8%

Analysts14

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -13% while net margin moved -50% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-13%

Margin effect-50%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 4.5% a year
✗ Profit has declined at 24.3% a year

Quality vs. Valuation

Company Quality

45/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

32/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

78.6x

3Y Median

74.6x

40 monthly readings · mean 67.1x · range 22.9x–108.8x

Sector Median

40.4x

median of 4 sector peers

🟡Currently trading close to its 3y median of 74.6x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 95% above the peer median of 40.4x.

vs. its own history

Fair

74.6x median over 40 months · +5%

vs. sector peers

Expensive

40.4x median of 4 peers · +95%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

78.6x

P/B

6.29x

EV/EBITDA

38.9x

PEG

3.86

Dividend Yield

0.07%

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.29x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention7

Margins are compressing
EBITDA margin has slipped from 37.8% to 26.5% over 3 years.
Debt is rising
Total debt is up 51% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 24.1% to 7.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 31.2% to 9.6% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 16% against revenue growth of -13% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 30% against revenue growth of -13% — stock may not be moving.

Red Flags

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 51% over 3 years, from ₹1,515 Cr to ₹2,291 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 11.4 points, from 37.8% to 26.5%.
🟡Profit is decliningFinancial
Net profit is down 57% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 16% against revenue up -13% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 30% against revenue up -13% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 37.8% to 26.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 16% against revenue up -13%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 95% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 24.1% to 7.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 24%✓ 26.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹292 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 9.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 74.6x✓ 78.6x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 3 neutral · 4 weak

Market Cap

₹48,114 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

78.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

6.29x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹55.69

Profitable

Profitable on a per-share basis

ROE

7.3%

Weak

Weak capital efficiency

ROCE

9.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

24.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

20.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.07%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹292 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹4,380

P/E (Forward)

39.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

19.7%

Good

Healthy core-business profitability

Net Margin

11.6%

Good

Strong bottom-line conversion

Current Ratio

1.72

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.03

Defensive

Steadier than the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

4490.3 / 4582.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

48.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5,594 Cr	₹4,194 Cr	₹4,615 Cr	₹4,875 Cr	-4.5%
EBITDA	₹2,117 Cr	₹1,012 Cr	₹1,176 Cr	₹1,292 Cr	-15.2%
EBITDA Margin	37.8%	24.1%	25.5%	26.5%	—
PAT (Net Profit)	₹1,329 Cr	₹435 Cr	₹546 Cr	₹577 Cr	-24.3%
EPS	₹120.97	₹39.59	₹49.71	₹52.56	-24.3%
ROE	24.1%	7.3%	7.5%	7.3%	—
ROCE	31.2%	10.7%	10.4%	9.6%	—
Total Debt	₹1,515 Cr	₹2,096 Cr	₹2,080 Cr	₹2,291 Cr	+14.8%
Free Cash Flow	₹8 Cr	-₹344 Cr	-₹337 Cr	-₹292 Cr	—

🔴 Revenue has shrunk at 4.5% a year over 3 years.

🔴 EBITDA has shrunk at 15.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 37.8% to 26.5% over 3 years (-11.4 pts).

🔴 PAT (Net Profit) has shrunk at 24.3% a year over 3 years.

🔴 EPS has shrunk at 24.3% a year over 3 years.

🔴 ROE has fallen from 24.1% to 7.3% over 3 years (-16.7 pts).

🔴 ROCE has fallen from 31.2% to 9.6% over 3 years (-21.6 pts).

🔴 Total Debt has grown at 14.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹8 Cr to -₹292 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹11,883 Cr

Total Liabilities

₹3,971 Cr

Total Debt

₹2,291 Cr

Cash & Equivalents

₹215 Cr

Operating Cash Flow

₹961 Cr

Capex

-₹1,252 Cr

Shareholding (proxy)

Institutional Holding

15.7%

Insider Holding

66.4%

Corporate Actions

Next Earnings

13 Nov 2026

Dividend Rate

₹3

Ex-Dividend Date

17 Sept 2026

Analyst Consensus

Recommendations

12 Buy · 2 Hold · 3 Sell

Target Price (Mean)

₹4,745.12

+8.3% vs CMP

Target Range

₹3,000 – ₹5,800

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

5 mixed1 general

Gujarat Fluorochemicals to host plant visit on July 16-17

scanx.trade, 18 Oct

Gujarat Fluorochemicals (NSEI:FLUOROCHEM) Stock Forecast & Analyst Predictions

Simply Wall Street, 13 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

FLUOROCHEM Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Gujarat Fluorochemicals falls 6% after Q4 PAT miss; brokerages cut ratings

Business Standard, 27 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Gujarat Fluorochemicals shares up 34% in 3 months: What’s driving the rally?

The Economic Times, 11 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Gujarat Fluorochemicals Shares Gain 2.75% in Today's Session

Moneycontrol.com, 12 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.3/20

🟢Financial HealthStrong14.5/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate6.9/15

🔴ValuationDemanding5.3/15

🟡RiskModerate5.8/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 24%26.5%
✗Free cash flow remains positive-₹292 Cr
✓Debt / EBITDA stays below 2x1.8x
✓ROCE stays above 8%9.6%
✓Valuation vs its own median of 74.6x78.6x today