This Small Cap Chemicals Stock Hits Record High; Further Upside Of 29% Seen From All Time High Hit Today

The shares of Gujarat Fluorochemicals Ltd. In trade on December 2, 2021 spiked to a record high of Rs. 2387.8, gaining 16 percent as against the previous close of Rs. 2059.9 per share on the NSE. On the BSE, the stock hit a high of Rs. 2388.45 which is also the stock's all time high price.

The gains in the refrigerant manufacturing company are seen after the brokerage firm ICICI Securities has initiated a 'Buy' on the scrip of Gujarat Fluorochemicals. In its report dated December 1, the brokerage stated that the company has good prospects ahead being the only manufacturer of fluoropolymers in the country. Also, the company is among the few entities outside China that manitain a huge portfolio within the segment.

"We initiate coverage on Gujarat Fluorochemicals (GFL) with a BUY rating and target price of Rs3,086 (upside 50% from CMP). GFL is in a sweet spot with its presence in fluoropolymers, demand for which is increasing driven by the new-age verticals of battery, solar panel and green hydrogen. GFL is in the process of expanding its capacity in fluoropolymers, which provides visibility on growth during our forecast period (FY21-FY24E)", said the ICICI Securities report.

"GFL has laid out a bold capex plan of Rs25bn over the next three years. It is likely to see its earnings grow at 45.9% CAGR over FY21-FY24E (on low base though), and RoCE (post-tax) improve from 6.7% to 18% over the same period. Despite the strong earnings outlook, GFL is trading at a reasonable P/E multiple of 20x FY24 vs 42.1x for Navin Fluorine and 27.5x for SRF", added the report.

Gujarat Fluorochemicals Limited (GFL) is an Indian Chemicals Company with more than 30 years of expertise in Fluorine Chemistry. GFL holds segment expertise in Fluoropolymers, Fluorospecialities, Refrigerants and Chemicals, catering to the material requirements of modern world. The company's products find application in mobility, telecommunications, healthcare and architecture among others.

At 1:30 pm, the stock of GFL traded at a price of Rs. 2299, up over 11 percent.

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