Gujarat Fluorochemicals' operating margin rebounds 4.45 points QoQ
Revenue rose +16.00% QoQ while expenses grew +9.33%; management attributed fluorochemicals growth to R32 sales.
Filed 12 Aug 2026, 13:43 IST · Gujarat Fluorochemicals Ltd (FLUOROCHEM)
Key takeaways
- Consolidated operating margin recovered 4.45 percentage points QoQ to 26.95%, as revenue grew faster than expenses.
- Consolidated net profit rose +19.02% YoY to Rs 219 cr, despite a 3.84 percentage-point rise in the tax rate.
- The stock's +2.67% filing-day rise was close to its 2.7% median absolute move after the past eight results.
Price around the results
R32 sales drove the sequential revenue rebound
Consolidated revenue grew +16.00% QoQ and +23.97% YoY to Rs 1,588 cr, while operating profit rose +38.96% QoQ. Management said fluorochemicals revenue increased +52.00% YoY and +44.00% QoQ, mainly because of R32 sales. Fluoropolymers also grew +15.00% YoY, which management attributed to higher volumes and a richer product mix.
Slower cost growth widened the operating margin
Expenses grew +9.33% QoQ against the +16.00% revenue increase, lifting operating margin by 4.45 percentage points. Year on year, expenses rose +23.80%, almost matching the +23.97% revenue growth, so the margin was broadly unchanged, up just 0.10 percentage points. Lower interest costs, down -38.10% QoQ, also supported pre-tax profit, while the tax rate fell 6.91 percentage points; other income contributed only 3.23% of pre-tax profit.
Margin recovered after a two-quarter slide
Operating margin had declined from 30.08% in Q2FY26 to 24.21% in Q3FY26 and 22.50% in Q4FY26 before recovering to 26.95% in Q1FY27. The quarter's margin was 8.54 percentage points above the 18.41% median for the 72 Commodities peers that had reported. It remained below the 30.08% level reached in Q2FY26.
Management highlighted capacity additions and customer qualification
Management said LiPF6 capacity expansion and customer commercialisation were progressing, while electrolyte qualification and sample development with Indian cell makers were advancing through audits and plant visits. It also said R32 capacity expansion was under way and should support margins and profitability, and that LFP and binder sales were expected to begin after initial customer approvals. Management outlined GFCL EV's planned Rs 6,000 cr capex by FY28, alongside targets of two times asset turnover and more than 25% EBITDA margin.
The market reaction was normal for this stock
The stock rose +2.67% on the results date, with a +0.54% opening gap and volume at 5.33 times the usual level. Across the past eight results, the stock rose four times and fell four times, while the median absolute move was 2.7%, making this reaction ordinary in size.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,588 cr | ₹1,369 cr | +16.00% | +23.97% |
| Other income | ₹10 cr | ₹2 cr | +400.00% | -56.52% |
| Expenses | ₹1,160 cr | ₹1,061 cr | +9.33% | +23.80% |
| Operating profit | ₹428 cr | ₹308 cr | +38.96% | +24.42% |
| Operating margin (%) | 26.95% | 22.50% | — | — |
| Interest | ₹26 cr | ₹42 cr | -38.10% | -13.33% |
| Depreciation | ₹102 cr | ₹97 cr | +5.15% | +13.33% |
| Profit before tax | ₹310 cr | ₹171 cr | +81.29% | +25.51% |
| Tax | ₹91 cr | ₹62 cr | +46.77% | +44.44% |
| Net profit | ₹219 cr | ₹109 cr | +100.92% | +19.02% |
| EPS (₹) | ₹20.17 | ₹9.92 | +103.33% | +20.42% |
Operating margin of 26.95% compares with a Commodities sector median of 18.41% across 72 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.67% | +2.81% |
Volume on the results session was 5.33× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Fluoropolymers delivered 15% year-on-year growth, supported by volume growth and a higher-value product mix.
- Fluorochemicals revenue grew 52% year-on-year and 44% quarter-on-quarter, mainly driven by R32 sales.
Guidance & outlook
- Global addressable Li-ion cell demand is expected to grow multifold by CY30.
- Fluoropolymer demand momentum is expected to remain healthy, supported by improving volumes.
- Refrigerants demand and pricing are expected to remain stable in the near term.
- Caustic soda demand is expected to remain stable in FY27.
- GFCL EV targets Rs.6,000 crore of capex by FY28, two times asset turnover and over 25% EBITDA margin.
Expansion
- GFCL is progressing with LiPF6 capacity expansion and customer commercialisation.
- R32 capacity expansion is underway and is expected to support margins and profitability.
- GFCL EV plans total capex of Rs.6,000 crore by FY28.
- GFCL EV is setting up an NGAAM anode facility.
New products
- GFCL is expanding its refrigerants portfolio with R134a.
New initiatives
- Electrolyte qualification and sample development with Indian cell manufacturers are progressing through audits and plant visits.
- GFCL EV expects commercial sales of LFP and binders to commence soon after initial customer approvals.
Competition
- GFCL describes its Dahej facility as India's largest refrigerant capacity.
- GFCL describes its Ranjitnagar facility as India's largest fluoropolymer plant.
Problems & risks
- The fluoropolymers segment operated despite a challenging global operating environment.
- Chloromethanes performance is expected to remain range bound.
What to watch
- Whether operating margin remains at or above 26.95% after recovering from 22.50% in Q4FY26.
- Whether R32-linked fluorochemicals momentum holds against the +52.00% YoY and +44.00% QoQ revenue growth reported by management.
- Whether the tax rate stays near 29.35% after reaching 36.26% in Q4FY26.