(1/19)
GFL houses the chemicals business of the INOXGFL group. It has a diverse product portfolio which includes caustic soda, chloro-methane, PTFE, HCFC & value-added products. It is one of the leading producers of Fluoro-polymers, Fluoro-specialities, Chemicals & Refrigerants.
GFL houses the chemicals business of the INOXGFL group. It has a diverse product portfolio which includes caustic soda, chloro-methane, PTFE, HCFC & value-added products. It is one of the leading producers of Fluoro-polymers, Fluoro-specialities, Chemicals & Refrigerants.
(2/19)
What are Fluoropolymers?
Fluoropolymers are a family of plastic resins which are based on fluorine/carbon bonding.
Fluoropolymers are strong, lightweight, and durable. They can also resist heat, water, salt and chemicals and do very well in demanding environments.
What are Fluoropolymers?
Fluoropolymers are a family of plastic resins which are based on fluorine/carbon bonding.
Fluoropolymers are strong, lightweight, and durable. They can also resist heat, water, salt and chemicals and do very well in demanding environments.
(3/19)
PTFE (which is the only fluoropolymer which does not melt) is processed through press & sinter techniques while the other common fluoropolymers (FEP, PVDF, PCTFE, PFA and a few others) are melt-processible. This means they can be compression and injection molded as well.
PTFE (which is the only fluoropolymer which does not melt) is processed through press & sinter techniques while the other common fluoropolymers (FEP, PVDF, PCTFE, PFA and a few others) are melt-processible. This means they can be compression and injection molded as well.
(4/19)
Global Supply Chain:
The chemical industry in China is undergoing structural changes owing to strict environmental norms, tighter financing and consolidation. So, global firms have been scouting for an alternative to China to source and manufacture products.
Global Supply Chain:
The chemical industry in China is undergoing structural changes owing to strict environmental norms, tighter financing and consolidation. So, global firms have been scouting for an alternative to China to source and manufacture products.
(5/19)
Owing to its strategic geographic location, India could create an opportunity for its chemical industry in specific value chains and segments. Moreover, with global manufacturing firms moving to India, the demand for Indian chemicals are anticipated to grow further.
Owing to its strategic geographic location, India could create an opportunity for its chemical industry in specific value chains and segments. Moreover, with global manufacturing firms moving to India, the demand for Indian chemicals are anticipated to grow further.
(6/19)
Key strengths:
• Robust market position:
GFL is the largest PTFE manufacturer in India and among the top four players globally. It is also a leading manufacturer of HCFC, which is used in refrigeration and air conditioning, among other industries.
Key strengths:
• Robust market position:
GFL is the largest PTFE manufacturer in India and among the top four players globally. It is also a leading manufacturer of HCFC, which is used in refrigeration and air conditioning, among other industries.
(7/19)
Driving growth:
It’s new fluoropolymer products saw compound annual growth rate of 57% in revenue in the five fiscals ended March 31, 2022. The new fluoropolymer and specialty products are expected to drive growth.
Driving growth:
It’s new fluoropolymer products saw compound annual growth rate of 57% in revenue in the five fiscals ended March 31, 2022. The new fluoropolymer and specialty products are expected to drive growth.
(8/19)
Forward Backward Integration:
The chemicals business is integrated forward into manufacturing PTFE and backward into manufacturing HCFC, anhydrous hydrogen fluoride, chloroform, and chlorine. This helps to be self dependent and source RM, keeping the margins high.
Forward Backward Integration:
The chemicals business is integrated forward into manufacturing PTFE and backward into manufacturing HCFC, anhydrous hydrogen fluoride, chloroform, and chlorine. This helps to be self dependent and source RM, keeping the margins high.
(9/19)
Higher margins of the new products:
The new fluoropolymer products have higher margins & should help improve profitability over the medium term. The Ebitda margin was around 30% in FY22 & is expected to improve to ~34% over the medium term driven by healthy realisations.
Higher margins of the new products:
The new fluoropolymer products have higher margins & should help improve profitability over the medium term. The Ebitda margin was around 30% in FY22 & is expected to improve to ~34% over the medium term driven by healthy realisations.
(10/19)
Risk Profiling:
The financial risk profile is backed by strong networth and comfortable gearing. The net Debt to equity ratio has come down from 0.38 in FY20 to 0.26 in FY22.
It’s interest coverage ratio is over 11 times & Gearing remained comfortable at 0.6 times.
Risk Profiling:
The financial risk profile is backed by strong networth and comfortable gearing. The net Debt to equity ratio has come down from 0.38 in FY20 to 0.26 in FY22.
It’s interest coverage ratio is over 11 times & Gearing remained comfortable at 0.6 times.
(11/19)
GFLs capex plan:
GFL is currently investing and has planned capex towards expanding its capacities for Bulk & Specialty Chemicals, Fluoropolymers and New Age products.
The capex plan is given below:
• FY22 - ₹660cr
• FY23 - ₹1150cr
• FY24 - ₹1000cr
GFLs capex plan:
GFL is currently investing and has planned capex towards expanding its capacities for Bulk & Specialty Chemicals, Fluoropolymers and New Age products.
The capex plan is given below:
• FY22 - ₹660cr
• FY23 - ₹1150cr
• FY24 - ₹1000cr
(12/19)
GFLs products and it’s application:
• Caustic Soda - Textiles, Soaps, Alumina
• Chlorofom - Feedstock for Refrigerant Gas R-22
• Methylene Di Chloride - Pharma API, Foam manufacturing, Agri Chem & Pharma Formulation
• CTC - Pesticides, Agri chem, Plastics, resin
GFLs products and it’s application:
• Caustic Soda - Textiles, Soaps, Alumina
• Chlorofom - Feedstock for Refrigerant Gas R-22
• Methylene Di Chloride - Pharma API, Foam manufacturing, Agri Chem & Pharma Formulation
• CTC - Pesticides, Agri chem, Plastics, resin
(13/19)
Fluoro Polymers Entry barriers:
• Technical knowhow, process safety, raw-material availability, capex intensive.
• Customer validation, approvals and qualifications, a time consuming & painstaking process
Fluoro Polymers Entry barriers:
• Technical knowhow, process safety, raw-material availability, capex intensive.
• Customer validation, approvals and qualifications, a time consuming & painstaking process
(14/19)
Fluoro Polymers high Growth Potential in Future industries like:
• 5G
• EV Battery
• Solar Panel
• Hydrogen Fuel Cells
• Semi-conductors
• Clean Environment
GFL has developed products to participate in each of these industries having huge potential & high margins
Fluoro Polymers high Growth Potential in Future industries like:
• 5G
• EV Battery
• Solar Panel
• Hydrogen Fuel Cells
• Semi-conductors
• Clean Environment
GFL has developed products to participate in each of these industries having huge potential & high margins
(15/19)
Recent Numbers:
• Revenue : ₹3954 cr vs ₹2651 YoY
• EBITDA : ₹1198cr vs ₹638 cr
• EBITDA m : 30% vs 24%
• PAT : ₹775 cr vs ₹355 cr
• PAT Margin : 20% vs 13%
• RoCE : 24.48% vs 11.92%
• RoE : 20.10% vs 9.87%
• Working Capital Days : 120 vs 168
Recent Numbers:
• Revenue : ₹3954 cr vs ₹2651 YoY
• EBITDA : ₹1198cr vs ₹638 cr
• EBITDA m : 30% vs 24%
• PAT : ₹775 cr vs ₹355 cr
• PAT Margin : 20% vs 13%
• RoCE : 24.48% vs 11.92%
• RoE : 20.10% vs 9.87%
• Working Capital Days : 120 vs 168
(16/19)
Weakness:
• Support to group companies:
As the chemicals business is marked by high cash generation, the company has supported group entities over the years through loans, advances, corporate guarantees. This has led to an increase in debt for GFL.
Weakness:
• Support to group companies:
As the chemicals business is marked by high cash generation, the company has supported group entities over the years through loans, advances, corporate guarantees. This has led to an increase in debt for GFL.
(17/19)
• Inherent Volatility:
The chemicals business is largely export-driven, & thus is vulnerable to volatility in international markets. Addition of large capacity overseas could constrain the it’s performance. Business remains susceptible to fluctuations in global supply.
• Inherent Volatility:
The chemicals business is largely export-driven, & thus is vulnerable to volatility in international markets. Addition of large capacity overseas could constrain the it’s performance. Business remains susceptible to fluctuations in global supply.
(18/19)
Shareholding Pattern:
• Promoters : 66.08%
• FIIs : 4.19%
• DIIs : 4.30%
• Public : 25.43%
Shareholding Pattern:
• Promoters : 66.08%
• FIIs : 4.19%
• DIIs : 4.30%
• Public : 25.43%
(19/19)
What are your thoughts about GFLs future prospects?
@caniravkaria @kuttrapali26 @aparanjape @Arunstockguru @Anshi_________
What are your thoughts about GFLs future prospects?
@caniravkaria @kuttrapali26 @aparanjape @Arunstockguru @Anshi_________
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