Gujarat Fluorochemicals will start its battery chemicals plant in FY13, and some of the revenue is likely to come from FY24, brokerage ICICI Securities highlighted. Anticipating a favorable market, the chemical manufacturer has increased the capital expenditure outlay by 10% for the next two years.
The brokerage has increased its EPS estimates by 1-10% compared to FY23E-FY24E and increased its target price. specialty chemical stock To 3,400 (from 3,356) with maintaining a buy rating. The shares of Gujarat Fluoro have given multibagger returns of over 200 per cent in a span of one year.
“Gujarat Fluoro outlines strong growth outlook for FY23 R125 and R142B, to potentially add 10-11 ktpa to zero sales volume in FY22, benefit of 15-20% price increase in PTFE inflows- Through new fluoropolymers – capacity expansion, and higher sales and potential double-digit price increases in more profitable products (FKM and PVDF) and new plant commissions in the fluorospecialty segment, and increased utilization,” the note said.
Gujarat Floro is in the process of expanding its capacity to 13.2 ktpa. ICICI Securities said it expects to consume maximum capacity in FY13, where FKM and PVDF are witnessing strong demand, and also expect double-digit price growth in FY13.
The company has raised its capital expenditure guidance for FY13 to from 2.5 billion The 11.5 billion higher capital expenditure target is to drive capacity expansion for the new fluoropolymer. It expects to add 4 ktpa capacity in this segment.
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