Gujarat Fluorochemicals profit falls 42.93% as costs and tax rise
Revenue grew 11.76% YoY, but the operating margin narrowed 2.48 percentage points and interest expense rose 61.54%.
Filed 26 May 2026, 16:08 IST · after market close · Gujarat Fluorochemicals Ltd (FLUOROCHEM)
Key takeaways
- Consolidated net profit fell 42.93% YoY despite 11.76% revenue growth, as the tax rate rose 24.28 percentage points and interest cost increased 61.54%.
- Operating margin narrowed 2.48 percentage points YoY to 22.50% because expenses grew 15.45%, faster than revenue.
- The stock fell 5.02% over five sessions, a weaker-than-usual reaction versus its 3.00% median absolute move after the previous eight results.
Price around the results
Revenue growth did not reach consolidated profit
Consolidated revenue grew 11.76% YoY to Rs 1,369 cr, but expenses rose 15.45%, leaving operating profit almost flat at a 0.65% increase. The higher cost base, along with a 61.54% rise in interest expense, pushed profit before tax down 21.20%. Other income contributed only 1.17% of pre-tax profit, so it did not materially support earnings.
Operating margin fell for a second straight quarter
Operating margin narrowed 2.48 percentage points YoY and 1.71 percentage points QoQ to 22.50%, as costs grew faster than revenue in both comparisons. This was the second consecutive quarterly decline after the margin reached 30.08% in Q2FY26 and then fell to 24.21% in Q3FY26. Even after the decline, the margin was 3.73 percentage points above the 18.77% median for 51 reported Commodities peers.
Battery-materials expansion remains the management focus
Management said all initial Phase I battery-materials capacity had been commissioned and contracted, with anchor clients for all products, and that LiPF6 orders were in place for FY27 and beyond. The company said it plans Rs 2,300 cr of FY27 capex across battery materials, including the NGAAM anode facility, and expects total capex of Rs 6,000 cr by FY28. Management also said commercial PVDF binder sales are expected in the first half of FY27 and LFP cathode active-material sales in H2FY27.
The initial market reaction was broadly ordinary, then weakened
The stock fell 2.70% on the first trading day after the results and was down 5.02% after five sessions, with five-day underperformance of 2.94% versus the benchmark. The first-day move was close to the stock's 3.00% median absolute reaction across eight previous results, while the five-day decline was larger. The results were filed after market close on 26 May 2026.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,369 cr | ₹1,136 cr | +20.51% | +11.76% |
| Other income | ₹2 cr | ₹-10 cr | — | -92.31% |
| Expenses | ₹1,061 cr | ₹861 cr | +23.23% | +15.45% |
| Operating profit | ₹308 cr | ₹275 cr | +12.00% | +0.65% |
| Operating margin (%) | 22.50% | 24.21% | — | — |
| Interest | ₹42 cr | ₹33 cr | +27.27% | +61.54% |
| Depreciation | ₹97 cr | ₹89 cr | +8.99% | +8.99% |
| Profit before tax | ₹171 cr | ₹143 cr | +19.58% | -21.20% |
| Tax | ₹62 cr | ₹41 cr | +51.22% | +138.46% |
| Net profit | ₹109 cr | ₹102 cr | +6.86% | -42.93% |
| EPS (₹) | ₹9.92 | ₹9.29 | +6.78% | -42.96% |
Operating margin of 22.50% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.70% | -2.67% |
| Next session | -4.10% | — |
| 5 sessions | -5.02% | -2.94% |
| 15 sessions | +1.41% | — |
| 30 sessions | +4.16% | — |
Volume on the results session was 2.55× 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
- R32 production and sales commenced in March 2026.
- Fluoropolymer revenue increased 19% year on year and 14% quarter on quarter, driven by higher volumes and price increases.
Guidance & outlook
- Ex-China lithium-battery cell demand is expected to grow from 500 GWh in CY26 to about 1.8 TWh by CY30.
- The company expects Rs.6,000 crore of capex by FY28, with two-times asset turnover and more than 25% EBITDA margin; full potential is expected in FY29.
- Commercial sales of LFP cathode active material are expected to start in H2FY27.
- Commercial PVDF binder business is expected to commence in the first half of FY27.
- Refrigerant demand is expected to remain healthy, supported by air-conditioning, refrigeration, cold-chain and AI/data-center cooling demand.
Expansion
- The company is setting up an NGAAM anode facility.
- The company plans Rs.2,300 crore of FY27 capex across its battery-materials portfolio, largely for growth including NGAAM.
- The company plans incremental HFC capacity expansion to use its Kigali Amendment entitlements.
- The company plans to invest about Rs.6,000 crore over the next three years to build large-scale battery-materials manufacturing capacity.
- All initial Phase I battery-materials capacity has been commissioned and contracted, with anchor clients in place for all products.
New orders
- LiPF6 orders are in place for FY27 and beyond.
- The company has signed long-term supply contracts with a large global anchor customer.
New initiatives
- The NGAAM anode facility will expand the company’s coverage to 70% of LFP cell cost.
- The company has completed the PVDF binder qualification process.
Problems & risks
- The fluorochemicals segment faced a challenging global environment and weakness in the Middle East market.
- Caustic soda pricing is expected to remain range-bound because of domestic capacity additions.
What to watch
- Whether operating margin holds above 22.50% after its second straight quarterly decline.
- Whether interest expense moderates from the 61.54% YoY increase.
- Progress toward commercial PVDF binder sales in the first half of FY27 and LFP cathode active-material sales in H2FY27.