Anti-dumping duty could help this maker of Teflon-like plastic—but only slightly
A proposed anti-dumping duty on Chinese and Russian imports of a high-resistance plastic material may give Gujarat Fluorochemicals a small boost, but rising domestic competition and operational risks could limit the impact.
The Directorate General of Trade Remedies has recommended a five-year anti-dumping duty of $2.8-5.9 per kg on Chinese and Russian imports of a high-performance plastic used in making Teflon’s nonstick cookware.
This is expected to benefit Gujarat Fluorochemicals Ltd as the company would get a more level playing field against low-cost imports from these countries.
Polytetrafluoroethylene (PTFE) is a key product for Gujarat Fluorochemicals, which controls an estimated 40% of the domestic market for the material that’s also used in the automotive, electronics, aerospace, and medical devices industries. PTFE belongs to a group of high-resistance plastics known as fluoropolymers.
“In FY25, India imported 5,253 tons of PTFE at an average realisation of $7.1/kg, with nearly 60% of volumes sourced from China and Russia at significantly lower prices of $6-6.5/kg, creating an uneven competitive landscape," Nuvama Research said in a recent report.
In 2024-25, the fluoropolymers segment accounted for around 55% of GFL’s consolidated revenue, with PTFE being a significant contributor.
JM Financial Institutional Securities said it expects a benefit of $3-3.5/kg for Gujarat Fluorochemicals from the recommended anti-dumping duty of Chinese and Russian imports of PTFE. “This is likely to result in a benefit of ₹80-100 crore in FY 27-28, translating into 3-4%/4-7% upward revision in our current EBITDA/EPS estimates [for GFL]," it said.
The proposed duty protection, however, is unlikely to be a free pass for GFL.
‘No scope for disappointment’
Rival SRF Ltd, with its 5,000-tonne PTFE plant, is scaling-up its volume. As that capacity ramps up, GFL would face more competition in the domestic market. So, the likely benefit of duty support on volumes may be more limited than it appears.
GFL’s management expects a 25% revenue growth in its fluoropolymers business in FY26, significantly higher than its 13% growth in FY25. The company’s current capacity is expected to reach optimal utilisation by March and further expansion is already planned.
The company’s fluoropolymers business clocked 16% revenue growth in the April-June quarter. But risks lie outside its core polymer business. A recent gas leak at its Ranjitnagar facility in Gujarat has raised concerns about operational reliability.
Further, any delay in ramping up its electric vehicle battery chemicals business could pose a threat to GFL’s earnings. This business is expected to contribute meaningfully to GFL’s earnings by FY28. JM Financial has pencilled in 6-14% Ebitda from this business in FY27-28 for the company, but even modest setbacks could temper those expectations.
So far in 2025, Gujarat Fluorochemicals’s stock is down by about 9%. Valuations, though, remain expensive at 39x FY27 price-to-earnings, show Bloomberg data.
GFL is upbeat on the prospects of its fluoropolymer business and earnings growth is likely to be driven by new product lines. Even so, with rich valuations, there is no scope for disappointment.
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