Why Anand Rathi is bullish on this specialty chemical stock1 min read . Updated: 20 Jul 2021, 12:22 PM IST
- The brokerage has initiated its coverage on the stock with a 'Buy' rating and target price of ₹1,840 per share
Domestic brokerage and research firm Anand Rathi has initiated its coverage on specialty chemicals company Gujarat Fluorochemicals (GFL). GFL, a part of the INOX group of companies, holds domain expertise in Fluoropolymers, Fluorospecialities, Refrigerants and Chemicals.
The company has three manufacturing facilities in India, a captive fluorspar mine in Morocco, warehouses in Europe and USA, and an extensive marketing network across the world. Its products are used in diverse end use markets and its clients belong to sectors such as automotive, aerospace, semiconductors, electronics, common household appliances, telecommunications, healthcare and architecture.
The brokerage has a 'Buy' rating on the stock with target price of ₹1,840 per share. ''Given the company’s strong business model, high margins, improving balance sheet, strong promoter group, We initiate our coverage with BUY rating and a target price of ₹1,840 per share,'' it said whiexplaining the rationale,.
The company has launched new products in fluoro specialty chemicals segment and is witnessing increasing demand from domestic as well as overseas customers to de-risk from China, Anand Rathi's note stated. The company is also witnessing increasing demand for new molecules by agro as well as pharma industry. It is envisaging a Capex of ₹350crore for additional capacity, it added.
GFL is also adding various new products and has filed for Lithium Hexafluoro Phosphate (LiPH6) as one of the products. Due to rising emphasis on electronic vehicles, demand for LiPH6 is expected to rise, the note said.
Shares of Gujarat Fluorochemicals were trading 0.4% lower at ₹1,485.7 per share on the BSE in Tuesday's early deals. The stock has rallied nearly 160% this year (year-to-date or YTD).
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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