CRISIL Ratings has reaffirmed Gujarat Fluorochemicals Limited’s (GFL) long-term bank facility rating at ‘CRISIL AA+/Stable’ and the short-term rating at ‘CRISIL A1+’. Concurrently, the rating for the Rs. 50 Crore Non-Convertible Debentures (NCDs) has been withdrawn following their maturity and redemption. The reaffirmation reflects GFL’s sustained healthy operating performance, evidenced by Rs. 3,628 crore in revenue for the first nine months of FY26, and improved operating margins.
Rating Reaffirmation and NCD Withdrawal
Gujarat Fluorochemicals Limited (GFL) has received a reaffirmation of its credit ratings from CRISIL Ratings. The long-term facilities rating stands at ‘CRISIL AA+/Stable’, and the short-term rating is affirmed at ‘CRISIL A1+’. Total bank loan facilities rated amount to Rs. 3000 Crore.
Furthermore, CRISIL Ratings has withdrawn the rating for the Rs. 50 Crore Non-Convertible Debentures. This action was taken in line with rating policy, subsequent to the instruments being fully redeemed upon maturity.
Key Drivers Supporting Ratings
Sustained Operating Performance
The rating reaffirmation is supported by GFL’s sustained healthy operating performance. Revenue for the first nine months of fiscal 2026 reached Rs. 3,628 crore, compared to Rs. 3,512 crore in the corresponding period last year. This was primarily driven by strong growth in the fluoropolymers (FP) segment during the first half of FY26.
The operating margin showed recovery, climbing to 27% in the first nine months of FY26, up from 23% in the corresponding period of FY25. While the third quarter saw a dip due to weak demand and production quota restrictions affecting R-22 output, performance is expected to recover over the coming quarters.
New FP Segment Growth Potential
GFL’s strategic focus on the new FP segment, which includes products like LiPF6, PVDF, and LFP for high-growth sectors such as EV batteries, is expected to drive significant revenue growth over the medium term. This shift toward higher-value products is anticipated to aid in reducing volatility and sustaining strong operating margins.
Healthy Financial Risk Profile
The company maintains a healthy financial risk profile, supported by robust debt protection metrics. The adjusted net debt to EBITDA ratio is expected to improve to below 1.3 times as of March 31, 2026. GFL plans substantial capital expenditure (capex) of approximately ~Rs 1,700 crore per annum for the next few fiscals, primarily directed towards the new FP segment, which is expected to be funded mainly through internal accruals.
Key Rating Sensitivities
Upward Triggers
- Significant revenue growth from new products leading to a leading market position, coupled with an operating margin consistently above 30%.
- Material reduction in debt and support to group entities, strengthening the capital structure.
Downward Triggers
- Slower-than-expected ramp-up in new segments, resulting in subdued operating profitability and Return on Capital Employed (RoCE).
- Significant, debt-funded capex or acquisitions, leading to the adjusted net debt to EBITDA sustaining above 1.75 times.
Business Strengths
GFL is recognized as the largest polytetrafluoroethylene (PTFE) manufacturer in India and a top global player. Its operations are highly integrated, running from backward integration with HCFCs to forward integration into manufacturing PTFE and new FPs, which enhances operating efficiency and reduces reliance on external sourcing.
Financial Snapshot (As on March 31, in Rs. Crore)
The comparison between the latest nine-month period and the previous fiscal highlights key trends:
- Revenue for FY25 stood at 4737, improving from 4281 in FY24.
- Profit After Tax (PAT) for FY25 was 546 (vs. 435 in FY24).
- Interest coverage remains strong, reported at 8.16 times for the latest period compared to 7.62 times previously.
Source: BSE
