CRISIL reaffirms rating of Gujarat Fluorochemicals with 'stable' outlook

Gujarat Fluorochemicals (GFL) said that CRISIL Ratings has reaffirmed its ratings on the debt instruments of the company at 'CRISIL AA+/Stable/CRISIL A1+'.

CRISIL Ratings stated that the ratings reaffirmation reflects established market position of GFL in the chemicals business, healthy operating efficiency driven by integrated operations, and strong financial risk profile.

While GFLs operating performance remained weak in fiscal 2024, the reaffirmation reflects expectation of significant recovery in operating performance in fiscal 2025. Further, the ratings also reflects the strong financial risk profile emanating from healthy debt protection metrics and strong net worth.

The rating reaffirmation reflects expectation of significant recovery in operating performance in fiscal 2025 which will remain key monitorable.

The financial risk profile remains strong with external net debt of Rs 1,797 crore and robust debt protection metrics with interest coverage ratio expected to sustain at over 7 times. CRISIL ratings also notes the steps that management taken to reduce debt in group companies by raising funds through various measures and improvement in operating performance of the wind business leading to reduced support from GFL.

The ratings continue to reflect the established market position of GFL in the chemicals business, healthy operating efficiency driven by integrated operations, and strong financial risk profile. These strengths are partially offset by the financial support extended to group companies and susceptibility to inherent volatility in the chemicals business.

Gujarat Fluorochemicals houses the chemicals business of the INOXGFL group. The company has a diverse product portfolio which includes caustic soda, chloro-methane, polytetrafluoroethylene (PTFE), HCFC and value-added products. It is one of the largest chemicals players in India, with a combined installed capacity of 72,000 tonne per annum (TPA) of HCFC, 19,750 TPA of PTFE, 138,450 TPA of caustic soda, and 109,620 TPA of chloro-methane.

The scrip had lost 0.42% to end at Rs 3273.95 on the BSE on Friday.

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