Gujarat Fluorochemicals Limited (NSE: FLUOROCHEM) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Unidentified Speaker
Bir Kapoor — Deputy Managing Director and Director
Akhil Jindal — Group Chief Financial Officer
Kapil Malhotra — Global Business Unit Head – Fluoropolymers
Manoj Agarwal — Chief Financial Officer
Rajiv Rao — Head of EV Battery Materials, GFCL EV Products Ltd.
Analysts:
Unidentified Participant
Nitin Agarwal — Analyst
Sanjesh Jain — Analyst
Rohit Nagraj — Analyst
Arun Prasath — Analyst
Naushad Chaudhary — Analyst
Ankur Periwal — Analyst
Dhruv Muchhal — Analyst
Meet Vora — Moderator
Archit Joshi — Analyst
Sanjesh Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Gujarat Fluorochemical Q4 and FY25 earnings conference call hosted by DAM Capital Advisors. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation. Conclude. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Agarwal from DAM Capital Advisors. Thank you. And over to you.
Nitin Agarwal — Analyst
Thank you. Manav. Hi. Good afternoon everyone and a very warm welcome to Gujarat Sorochem’s post results conference call hosted by Dam Capital Advisors Limited. On the call today we are representing Gujarat 4 of Chemical Management. Dr. Bir Kapoor, Deputy Managing Director and Chief Executive Officer and other senior members of the management team. I will hand over the call to the Gujarat4UK management team to take the call forward from here on. Please go ahead sir.
Bir Kapoor — Deputy Managing Director and Director
Thank you, Nitin. Good afternoon everyone. And this is Bir Kapoor. Very warm welcome to all of you for GFL’s Quarter 4 FY25 earnings call. For this call I have with me my colleagues Mr. Akhil Jindal who is Group CFO. Mr. Manoj Agrawal who is CFO of GFL and I also have with me Mr. Kapil Malhotra, Business Head of Fluoropolymers and Mr. Rajiv Rao who is the Business Head of EV Chemicals or Battery Chemicals business. The company announced its quarter four FY25 and full year results at its board meeting held today. The results along with earning presentations are already available on the Stock Exchange and on our website.
I’ll briefly highlight the key financials and then give you an update on on business operations and outlook. I am pleased to share that for the quarter we have reported revenue from operations of Rupees 1225 crores reflecting an 8% increase year on year. Our EBITDA grew significantly by 28% to INR 305 crores with margins improving from 25% to 25% from 21% in same time last year which is quarter 4 FY24. Our consolidated pad nearly doubled reaching 191 crore in this quarter. Though the bulk chemical segments underperformed during the quarter impacting the overall performance. While the core sectors reported healthy growth.
Our net Debt as on 31st March 2025 has come down to Rupees 1451 Crores as compared to 1769 Crores as on 31st March 2024 resulting in improvement of net debt to equity from 0.3 to 0.2.
operator
Sorry to interrupt, sir. Sorry to interrupt. Your voice is breaking a bit. Can you just repeat your last sentence?
Bir Kapoor — Deputy Managing Director and Director
Our net debt on 31st March 1035 came down to. Is that okay?
operator
No sir.
Bir Kapoor — Deputy Managing Director and Director
Still breaking.
operator
Yeah.
Bir Kapoor — Deputy Managing Director and Director
Very close to. Can you hear me
operator
Sir it’s quite breaking.
Bir Kapoor — Deputy Managing Director and Director
Is it better now?
operator
No sir.
Bir Kapoor — Deputy Managing Director and Director
Still not better?
operator
No.
Bir Kapoor — Deputy Managing Director and Director
Then I’ll have to. Can you call me back then please? Sure.
operator
Sure sir. Sure. Ladies and gentlemen, the management line is disconnected. We’ll reconnect them. Meanwhile you can please patiently wait. Ladies and gentlemen, thank you for patiently waiting. We have the management back with us. Over to you sir.
Bir Kapoor — Deputy Managing Director and Director
Thank you. Thank you. Nitin. I’m sorry for the disturbances. As I was saying, our net Debt as on 31st March 2025 has come down to 1,451 crore as compared to Rupees 1769 crore as on 31st March 2024 resulting in an improvement of net debt to equity from 0.3 to 0.2. Also, working capital days have increased in anticipation of the growth in next few quarters. We have increased production of fluoropolymers and battery materials to build up the pipeline and we expect this to normalize in next one to two quarters. This strong financial performance was largely driven by sustained growth in our fluoropolymers vertical and a better product mix.
While we continue to invest heavily especially in our battery materials business, profitability remains impacted by higher depreciation and interest cost associated with this CapEx. We expect this to normalize as revenue from the segments ramp up. Now let me briefly take you through the performance of each business segment for the quarter. In our fluoropolymer business, revenue growth was primarily driven by volume increase in new fluoropolymers. Prices remain stable across domestic as well as global markets. FKM volumes are steadily rising as new project approvals are under progress. Growing demands from automotive, semiconductors, electric vehicles and energy storage system is opening significant opportunities for this sector.
As indicated during the last quarter, we are witnessing a continued growth in fluoropolymers revenue and volumes due to our focus on higher value added grades of new fluoropolymers. This segment has also started seeing a positive impact due to exit of legacy players that we had predicted several quarters back. Going forward we expect this momentum to continue as the fundamental of this segment is quite strong and is driven by growth in sectors like semiconductors, automotive within our fluorochemicals business, we saw improvement in R22 prices during the quarter and further increase is expected as global production quotas reduce.
Direct sales and blend of R125 also improved due to seasonality with a positive outlook ahead. Specialty chemicals remain stable and we anticipate margin and volume improvements going forward in FY26. We are also working on multiple options to initiate the commissioning of R32 plant much ahead of the schedule and expect to commence the commercial sale starting during the second half of this financial year. During the quarter, our bulk chemical segment faced challenges due to an incident at one of our plants in the H CMS1 plant leading to approximately 15% production loss and softening of MDC prices have negatively impacted our profitability in this segment.
Caustic soda prices also remained flat but sequentially on year. On year MDC prices declined due to new capacity additions but are expected to stabilize in in coming quarters. Overall bulk chemical segment is expected to resume to normalcy in coming quarters. Let me now give you an update on the battery materials business which caters to EV and ESS segments. GSCL EV holds the first mover advantage as a non Chinese global supplier in the battery material space. We continue to make rapid stride in building this business on strong fundamentals and establish ourselves as a global supplier with wide range of products.
Our Lips 6 salt production has stabilized meeting stringent global specifications with strong customer interest driving the potential market demand. We are moving ahead with phase two and phase three capacity expansions plan in FY26. Our LFP plant have achieved mechanical completion with commissioning and trial production set to begin next month. We have also established part pilot plant and R and D capability to develop new grades and wide product range in this product category. Our electrolyte and binder plants are also at advanced stage of customer validation with multiple successful global audits already completed. We are pleased to share that our customer engagement has increased significantly with technical visits and audits from prospective clients in the us, eu, Korea, Japan and India.
Demand for our product is expected to be robust, driven not only by EVs but also by the growing energy storage system markets which is critical to renewable energy and green hydrogen transitions as well as rise of AI powered data centers. The global battery materials market remains promising despite some reported delays. The US continues with ambitious capacity expansions while Europe’s EV and battery production capacity is set to grow substantially reaching nearly 800 GWh by 2030. Domestically capacity announcements exceed 300 GWh offering a large addressable market for us in both ESS as well as EV sectors. We have announced CAPEX of 1600 crores for FY26 with 1200 crore earmarked for GFCL EV largely towards increasing the current capacities with increased customer approvals and audits in place.
And rupees 400 crores for GFL largely earmarked for fluoropolymers and refrigerant business. To summarize, the fluoropolymer segment will benefit from high value product adoption. Fluorochemicals will see improved pricing and demand in FY26 and our EV battery materials business is poised for significant ramp up. We remain confident in delivering sustained growth and creating long term value for all our stakeholders. Thank you so much for your interest in GFL and I now open the floor for questions.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch. Don’t telephone. If you wish to remove yourself from the question queue you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from the line of Sanjay Jain from ICICI Securities. Please go ahead.
Sanjesh Jain
Yeah, Good afternoon sir. Thanks for checking my question. Hi sir, first set of question on the increased working capital on chloropolymer and battery chemical we said that we have built a good inventory in the anticipation of rise in Demand in the 1 inch of FY26. Do we have a confirmed order or do you think it’s more of an anticipation and projection which is leading to bump up in the inventory level at our end.
Bir Kapoor
See in case of fluoropolymers we of course have our order book and that’s the reason we have increased our supplies and trying to fill up the pipelines. Similarly in EV battery material as well we have long term projected demands given to us by our customers and in that anticipation we are building up our pipeline.
Sanjesh Jain
When we say that there is a long term projection provided by the customer that means we have been completely approved, we have received POS or how is it.
Bir Kapoor
The way it works is that typically once our customer engagement starts both thing goes in parallel. The commercial discussions which essentially indicate what material that we can supply with what quantities and also projections of the potential pricings and the qualification also move parallel because these are long term contracts Sanjay. So in these our capability to provide certain quantities in long term is a key aspect of our customer engagement and contracts.
Sanjesh Jain
So why to make material is so much of advance if it is not for just approval.
Bir Kapoor
Let me. I think it’s not that we are making too much material in advance. This is for example in case of fluoropolymer, as you are aware we are doing stock and sell in US and we have warehouses and the depots in North America as well as Europe. Considering the transit time from here to US and building up the capacity in terms of anticipation of the sale. So this is the pipeline which is getting filled up which includes building up the capacity not only at the depot but also the shipment which is taking almost two and a half to three months to reach.
Sanjesh Jain
Got it? Got it. My second question is on the CapEx of 1600 crores, particularly 1200 crores on the EV side, I thought that we will do more CapEx based on the customer orders and it will be make to order kind of situation. Why are we going ahead with the phase two, phase three kind of capacity addition where we are ready to sign a long term contract.
Bir Kapoor
We already have anticipated demand and the projected demand from our customers and because the capacity building takes a long time. Sanjay. Okay, so when see the way. In fact I said it many times that in our EV material business we initially started with commercially viable size. Okay. And then we are now building up. Once we have demonstrated the capability to produce a high quality material which is benchmark at the world quality. Now we are building up the capacities and adding up the volumes.
Sanjesh Jain
Okay?
Bir Kapoor
It’s happening as per the plan. We already had planned the phase 2, phase 3 capacity additions. So we started with LIPF 6 plant, LFP plant demonstrated, customer have approved, visited our sites and now in order to fulfill the projected demands we need to build up capacities.
Sanjesh Jain
Will it be fair to assume that because LFP is yet to stabilize all the 1600 troops is largely towards LIPF6 and electrolyte?
Bir Kapoor
Not really. Because if you look at our product portfolio, we have LIP of six, we have binders, we have LFP and we have electrolyte. And also in case of salt, we also have backward integration to make LIF and also high purity hf. So these capex involves the overall bouquet of products as well as the backward integration.
Sanjesh Jain
See, there is so much of demand we anticipate for chloropolymer, battery, chemical. Do we have enough HF and it becomes a bottleneck for us.
Bir Kapoor
As of now we don’t have an issue with our hf. However, in order to cater to future demand, we have already announced that we’ll be adding up HF capacity.
Sanjesh Jain
When we did the announcer. Sorry I missed it
Bir Kapoor
last time we said that when R32 and AHF we will probably be adding both the capacity.
Sanjesh Jain
Okay. So it will come along with. My next set of question is on the guidance and we said we want to achieve say 2000 crores kind of an EBITDA in FY26. The start appears to be much slower or the end for FY25 appears to be much lower than probably what we would have desired which would have given us the line of sight for this. Sitting at 306 crore quarterly. We are anticipating 500 crores quarterly and exit probably above 600. This is almost 2x the EBITDA. Are we still remain confident on those guidance?
Bir Kapoor
Yes we are. I mean fluoropolymer what we are seeing the traction right now. We expect to see almost 25% growth in fluoropolymers from where we are today. So we will see gradual growth in fluoropolymer as we go along. And this we had said earlier and we are seeing it again. Saying it again. We would continue to see growth in our core business which is fluoropolymers.
Sanjesh Jain
And margins. Again
operator
sorry to interrupt. Mr. Sanjesh.
Sanjesh Jain
Yeah. I will get you to
operator
please rejoin the queue.
Sanjesh Jain
Yeah. Thanks. Birth answering all those questions of patiently and best of luck for the coming body.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to take questions from all participants in the conference please restrict yourself to only two questions per participant. Should you have a follow up question we request you to rejoin the queue. We have our next question from the line of Rohit Nagraj from BNK Securities. Please go ahead.
Rohit Nagraj
Thanks for the opportunity and congrats to see that margins have expanded on bio. Numbers have been pretty good. Sir, first question is on fluoropolymers. So last time you had indicated that we’ll be able to optimally utilize the fluoropolymers capacity by end of FY26. And just now you also alluded that we have relatively good visibility on the same when we are Talking about the 400 crores of capex on the legacy business, does this also include fluoropolymers? Because beyond SR26 if we are optimally utilizing you will need additional capacities to cater from FY27 onwards. So just your thoughts on this.
Thank you.
Bir Kapoor
Yes. Yes Rohit, thanks. Exactly. That’s what our plan is that the 400 crore capex that we are planning in GFL will primarily cater to to fluoropolymers because there will be some amount of capacity Addition balancing debottlenecking which will happen as we go along. And I have already stated that earlier long time back that we have built up the capacity required in monomer now downstream setting up the reactor to add incremental capacity requirements are not that significant. So we are taking into account our future business. This is what we intend to do in this coming year.
Spend part of the 400 crores in fluoropolymers.
Rohit Nagraj
Got this sir. Second question on the EV part of the business. Given that we have already submitted commercial samples, we’ve received approvals for most of the products. Can we envisage a sizable contribution from the EV subsidiary in FY26 and obviously that will further scale up in FY27.
Bir Kapoor
We expect the revenue from EV business to trickle in towards the second half of this financial year. I would not say sizable because GFL of course is a a fully grown business. But nevertheless we expect the ramp up to continue and pick up in FY27.
Rohit Nagraj
I’ll get back into view. Thanks a lot. And all the tests.
Bir Kapoor
Thanks Rohit.
operator
Thank you. We have our next question from the line of Arun Prasad from Avenders Park. Please go ahead.
Arun Prasath
Thanks for the opportunity. Good Evening sir. So first question is on the once again battery, chemicals, EV materials. So we have kind of indicated 1,200 crores of CapEx in 26 of that thousand crores from the fund inflation. Rest of the 200 crores from the internal accruals. So this 200 crores is operating cash flow generated by the EV business or it is a leftover infusion from the previous years. How should we see this?
Bir Kapoor
See this 1200 crore that we are saying is the cash flow out that will happen this year in capex is for EV business. So this will be of course in continuation to whatever the project that we had started. There’ll be some more new project that will be added as we go along. I don’t think we have said that there’ll be a split in terms of accruals or outside the EV businesses. Of course we have indicated earlier will be funded through external. Whatever had to happen from internal accruals, we already did that. Going forward we’ll be funding it through external fundraiser.
Arun Prasath
No sir, we have mentioned it is self funded. Rest of the CAPEX will be mentioned by the self funded by EV business. That’s why the question is.
Bir Kapoor
I just want to add. Let me get Akhil online here. Akhil is our.
Akhil Jindal
I think what we mentioned the last three, four conferences is that the funding will be done from external sources without relying on the internal cash flow of GFL and which is what we did in the FY25. If you see the entire capex of.
Manoj Agarwal
Almost 700 crores is funded out of.
Akhil Jindal
The equity raised in September, October of last year. We raised thousand crores last year which has funded the capex. We have still left some cash out of that equity raise which would be partly used for capex this year. Also the new capex that Dr. Kapoor just mentioned would all be funded by the external sources without relying on the cash flow of gsl. That has been our stated position for the last six to nine months and. That continues to be okay.
Arun Prasath
Understood sir. So second, when we are saying that we will be getting some revenue trickling in from the EV business try to assume that first it will be from the fluoropolymers because at least in the salt and the electrolytes we still don’t get the local customers or the, or the our overseas customers giving the order. So fluoropolymers will be the main contribution. Even in the EV business.
Bir Kapoor
It will be both. It will be salt as well as fluoropolymer which is used as a binder because both are at very, very advanced stages of getting qualified. So you’re right. I mean there will be a combination of the two. I will not say it’s only fluoropolymer, it’s both because both are very close to getting commission.
Arun Prasath
Right sir, finally one question on the PTFE and the fluoropolymer. So can you just help us understand in terms of pricing in which stage each of the molecules are say skm, PFA and PTFE which is further basic and valued at where pricing is in say at the bottom of the cycle or in the top of the cycle or or in the middle trending upwards or downwards. Some color on this would be helpful.
Bir Kapoor
Yeah. Thanks arun. I’ll request Mr. Kapil Malhotra who is doing a set of fluoropolymer to take.
Kapil Malhotra
Hi Arun. Good afternoon to you. Firstly I would like to say that in the last two conferences I had mentioned that in PTFE we are trying to go for high value added grades which is a constant with us. And currently also we are doing the same. As such the prices are stable in the market but we are constantly churning our portfolio to go for higher value added grades of PTFE which is also showing reflection in our margin which are improved coming to FKM and pfa. In FKM we are also because FKM is kind of a business where there are new Projects which are constantly under approval.
So quarter by quarter we are improving our business volumes in FKM prices are stable and there also we have some higher value added grades where approval process was long. But now the approvals have started coming in and commercials have started in pfa we are into a regular business which I also told last time that approvals have come even from some of the semiconductor applications and some of the approvals are still underway and they will keep on coming quarter by quarter and the business will keep on growing. And also one of the legacy player has moved out that benefit also we have started seeing and we’ll subsequently start seeing in the next quarters also.
Arun Prasath
Okay. The we are seeing the benefit in terms of pricing or only because I don’t see much benefit in some in terms of pricing in the. Because of the legacy player exit the.
Kapil Malhotra
Pricing we are always at par with the other players. But yes, volumes definitely will increase. They have started increasing and we also feel that most of the inline stock material will also finish off by this quarter end. So even volumes will also keep on increasing from next quarter onwards. Further.
Arun Prasath
Understood. Finally on the power and fuel is the full benefit fully reflected in this quarter or is it still something will trickle in the next quarter as well?
Bir Kapoor
Which. Which it’ll. It will come next year. Manoj, you want to add that.
Manoj Agarwal
Yeah. Part of the commissioning has happened and part will be in the this financial year 26.
Arun Prasath
So this is only very in the early stages. So we still think more than 60 70% of the benefit is set to. That’s the right understanding.
Manoj Agarwal
Yes. Yes.
Bir Kapoor
Okay.
Arun Prasath
All right sir. Thank you. All the best sir. Thank you very much.
operator
Thank you. A reminder to all participants if you wish to ask any questions you may press star and 1. We have our next question from the line of Naushat Chaudhary from Aditya Birla Sun Life Insurance. Please go ahead.
Naushad Chaudhary
Thanks for the opportunity. 2 Clarification first on the EV chemical business. In last two two and a half years the a lot has changed in the overall EV project related business from a pricing point of view and all. I was just wondering has this also impacted in terms of cost or capex per ton or whatever metrics we follow from a capex requirement pattern for this business.
Bir Kapoor
Thanks Nasha. What we have been. Obviously there has been some changes in the global market because of the tariff situation etc. And of course I think what you’re referring to is the overall battery material prices in China have dropped down significantly. However when we look at our own business plan we have A very long term plan and where we have factored in our positioning which is typically as a supplier, which is an outside China supplier with a very large bouquet of products, providing a robust supply chain which is independent of China with this kind of positioning we have our own set of plan with respect to the what pricing and the pricing premium that we can command over China.
So our business plan and CAPEX is were based on that situation and we have already accounted for what the current pricing is today because these pricing have been quite stable now for almost a year. What you are talking about almost three years back they were high but I think last one and a half year or almost one year they have been very, very stable whether you look at the SALT pricing or LFP or any of the battery materials pricing. So our CAPEX plan, our business model and the projected business financials we have already accounted for what you see in the market today.
And coming back to your capex as part of. Yes, we have a target in our mind because the initial plan as we go on adding capacities, our specific CapEx are benchmarked at the global level. So what for example the plant is costing, for example in China our target is when we reach the full commercial scale capacity additions this will reach the same level of benchmarks.
Naushad Chaudhary
Oh, I’m sorry. Actually my question was basically because the metrics is changing for the industry. It was emerging industry initially the CAPEX pattern would have been higher I’m just assuming because things have changed now has the CapEx pattern requirement for the industry changed or is it at par what it was two years back?
Bir Kapoor
No, if you talk about the industry again I would emphasize there are two set of industry. One is within China, another is outside China. Outside China there have not been a very significant capacities of SALT for example or for LFP for that matter. So outside China it’s still capacity is being added and it’s built with GFL being one of the leading players. So our benchmark of the capex are still the same. So outside China these materials have not really developed yet. It’s still at a very, very early stage. So most of the development in terms of capability has happened within China.
Outside China it’s at very, very early stage. Do I answer your question?
Naushad Chaudhary
Yes. Excluding X of China, nothing is nothing much has changed in terms of CapEx.
Bir Kapoor
Absolutely, absolutely.
Naushad Chaudhary
Okay. And second question on this, if you have to, you know, highlight a few key risk to the EV project business, what would that be?
Bir Kapoor
See in terms of, you know, fundamental of EV is very, very strong because this has to Come because of the green climate agenda. Plus as we are seeing growth in renewables, we talked about growth in EV as well as ess, both sectors. So in terms of risk, if I see it’s in terms of timing how these eventually grow. But fundamental that whether we will be able to reach for example in India 300 GWh not. I don’t think we see that as a big risk at the moment.
Naushad Chaudhary
Okay. And overall working capital cycle for this business versus base would be similar or would there be any difference?
Bir Kapoor
We expect it to be similar because in this case is also since our target market is a big chunk of that is outside India. So we will have to be supplying material to us. For example, there’ll be material which will be on the high seas. We’ll have to maintain certain level of stocks. So we should be very similar to our fluoropolymers.
Naushad Chaudhary
Sure. All the way. Thank you.
Bir Kapoor
Thank you. Thank you.
operator
Thank you. A reminder to all participants, please restrict yourself to only two questions per participant. Should you have a follow up question, we request you to rejoin the queue. We have our next question from the line of Ankur from Axis Capital. Please go ahead.
Ankur Periwal
Yeah, hi sir. Thanks for the opportunity. First question on the fluoropolymer side, you know, so early teens sort of growth this year. If you could highlight what has been the key driver for this growth largely coming from the new fluoropolymers or on. The PTFE side
Bir Kapoor
it’s largely from Ankur is largely largely from new fluoropolymers. And that’s what we have said because we had built up capacity anticipating the demand to pick up for multiple reasons. And this is exactly the way it is progressing now. It’s happening in new solar polymers.
Ankur Periwal
Sure. And you know, as you highlighted in one of the earlier comments, the consolidation, the consolidation among the global players, the benefit from that it is yet to come in or we have already started seeing some benefit in Q4, the volume led growth.
Bir Kapoor
So some of it has trickled in. But more lot we expect to see a lot more because you know, for one of the legacy players stopped their production in a few months back in December only and there were pipelines. So we have started seeing attraction now. And there’s another legacy player who has relocated and stopped the production in Europe. So a lot of it we expect to see I think in quarters to come. You want to add Kapil please.
Kapil Malhotra
Yeah. Ankur, as just mentioned, some time back we have started seeing some traction. But yes, as Dr. Kapoor is mentioning, there are some material which are in the pipeline stocks, in the customers and the pipelines. So they are expected to finish off by this quarter end and we expect as the customers are giving us indications the subsequent quarters these volumes should grow up in replacement of the product which were being supplied by these legacy shares.
Ankur Periwal
Sure. So possibly a step up jump there maybe in the H2 coming in. Fair. Just a second bit on the battery chemicals side while you highlighted that you know this capex is going to be pretty widely spread across the multiple products that we are trying to address in this value chain. Just trying to get your thoughts in terms of let’s say our quality as well as you know, cost competitiveness in salt binders and you know, other products vis a vis not only China but let’s say non Chinese vendors pricing you did highlight but overall on the you know, offering side.
Bir Kapoor
So you know if we look at among our non Chinese players I think we are one of the most competitive in terms of of not only capability to supply, add capacities and give quality. If you look at binder which is fluoropolymer, of course we have been around in this business for a very long time so we are barely at the benchmark in terms of quality as well as capability and in salt as well. In last one year since we started and started optimizing and stabilizing our plant. I’m happy to share that we have reached the world benchmark in terms of quality today.
Our salt quality is comparable to anywhere in the world.
Ankur Periwal
Sure. And pricing as you highlighted will be let’s say a premium to Chinese but let’s say at par to the other global vendors. Of course that’s a fair assumption.
Bir Kapoor
Yes, that’s fair assumption.
Ankur Periwal
Okay, great sir, thank you and all the best.
operator
Thank you. We have our next question from the line of Dhruv Muchar from HDSE amc. Please go ahead.
Dhruv Muchhal
Yes sir. Thank you so much. Sir, on the R22 price strength, so prices are positive but any implication from the quota cut volumes or it’s more than offset by the pricing benefit. Hello.
Bir Kapoor
Yes, Dhruv. I think yes it’ll offset but at the same time, you know if I look at my entire segment we will of course be adding R32 as well. So if I look at it, overall refrigerant segment is expected to grow in spite of the quota cut in R22. The pricing will of course more than compensate for it. And in addition as we’ll be adding R32, our overall refrigerant portfolio is expected to grow.
Dhruv Muchhal
And sir, on R32 the timeline remains by end of FY26. Is it?
Bir Kapoor
We are trying to see how we can expedite to come to the market. We are looking at various options including you know retrofitting and let’s see. But we will. Our target is to bring the product by the second half of this year. This financial year.
Dhruv Muchhal
Okay. I mean you’re trying to prepone it further.
Bir Kapoor
Yes.
Dhruv Muchhal
Okay. Okay.
Bir Kapoor
Looking at the market opportunity. We are looking at how best we can prepone it and bring the product to the market.
Dhruv Muchhal
But sir, then is it fair to assume the full run rate volumes of 20,000. I think what you are planning. I’m not sure 20,000 if it’s the number that happens from the end of FY26 or can it be also earlier? I mean the retrofitting can give you all the volumes or it will be gradual only.
Bir Kapoor
It of course depends on how market ramps up. But our target of course is FI 20,000 that we had indicated earlier. Which will possibly be a combination of retrofitting as well as if we are not able to get that much volume it will be the capacity capex additions. So it will be the combination of the two. However the target is 20,000. That’s we are holding on to that target.
Dhruv Muchhal
And sir sorry quick two questions is on power and fuel. Sir, what would be the annual saving from power and fuel be with the captive plant and just some breakup. If you can give of the CWIP that we have it’s about 15. 1600 crore as of March. A reasonably sizable number. So some sense of what this capex is relating to.
Bir Kapoor
Yes. Dhruv, I am requesting Manoj Agrawal to.
Manoj Agarwal
Yeah. So as we indicated earlier also the total saving will be till the tune of 120 crores to 150 crores on annualized basis. But that will trigger in partly this financial year. And based on the as and when the facilities comes up.
Dhruv Muchhal
So because this quarter itself we see a delta of about if I’m not wrong 2030 odd crore.
Manoj Agarwal
But that that is on account of our shutdown which has happened due to the incident which has happened in the CMS One plant. So our CI and CMS was shut down for a 15 days. That has delta is to going because of that not the counter saving.
Dhruv Muchhal
Oh okay. Got it. And on the CW
Manoj Agarwal
pardon
Dhruv Muchhal
the CWIP number 1600 crores we have as of March. That pertains primarily for capital.
Bir Kapoor
I think we as we talked about that some of the reason we expect that the working capital to normalize in.
Dhruv Muchhal
Terms of listening to the Capital work in progress. The fixed assets that we have.
Manoj Agarwal
No see capital work in progress. That depends on all the projects whenever gets completed and commissioned and then capitalizing the books of accounts. So what management is more interested in giving you guidance upon the cash flow perspective how the capex will pan out in this next financial year and CWIP will take an accounting course?
Dhruv Muchhal
No, I’m wondering the 1600 crores is say a large part. I’m not sure 60, 70% of this relates to batteries or this has primarily some of the polymer businesses and batteries is coming up now. Just trying to understand it is a consolidated account.
Manoj Agarwal
It consists of batteries also. Yeah, it includes battery business.
Dhruv Muchhal
Okay. Also some specifics would be helpful but probably I’ll take it offline. Thank you so much. All the best.
Bir Kapoor
Yeah, thanks. Thank you.
operator
Thank you. We have our next question from the line of Alok, an individual investor. Please go ahead.
Unidentified Participant
Hello sir. Thank you for the opportunity. There are two questions. The first one was coming to the overall EV market. Where is it that you see positive spots like if I were to compare Europe and US where do you see more confidence from your customers and how are you looking at these different export markets that you’re targeting?
Bir Kapoor
Yeah, I think we are looking at. I think we have indicated a number of times that one of the market that we are focusing on is US where we expect to see very large growth. Much more than I’ll anyway request Rajiv to add. Rajiv.
Rajiv Rao
Yeah, so this is Rajiv here. So our focus markets for our EV products are going to be US and India. In the US markets it would be US companies as well as the Koreans and Japanese companies who have a significant play in the US markets. So while we look at going into the US markets we are in touch with companies in US, Japan and Korea. And also the next market is the India market which is just starting with a few cell OEMs getting ready to start their plants. So India is the second market that we are focusing on.
We have good confidence in both US and India markets and Europe is also starting off. We have been in touch with customers, validated some of our binders, also sampled our electrolyte salts. So that is also going on. So us, India, Europe, those are the. Three markets
Bir Kapoor
but Europe has been slightly behind compared to US and India.
Unidentified Participant
Okay sir. And you don’t see any particular major headwinds from the recent administration moves and policies?
Bir Kapoor
Not really. In fact, on the contrary, Alok, we see that as a positive because one of our premise is that we provide an alternate supply chain and Whatever that we are seeing, of course it will take several months to fully stabilize and unfold what the tariff situation will be. But nevertheless if I look at the differential there will always be an advantage from India side or supplier who’s from India.
Unidentified Participant
Okay sir. And lastly I think you mentioned earlier in the call that you’re expecting to deliver about 2000 crores EBITDA for FY26. So did I hear that correctly?
Bir Kapoor
I don’t think we said that 2000 crore but we expect. Of course, but we have never given this number in the conference.
Unidentified Participant
Okay, So I mean 500.
Bir Kapoor
What I have stated, let me repeat what I have stated is we have stated that we expect to see a significant growth in our fluoropolymer segment which we expect to achieve almost 25% growth year on year or higher than that. And then we have also said growth will come in refrigerants which will primarily because of course the new product being added. Okay, this is what we have indicated.
Unidentified Participant
Okay, understood. Thank you.
Bir Kapoor
Thank you.
operator
Thank you. We have our next question from the line of meet Vora from MK Global. Please go ahead.
Meet Vora
Yeah, thanks for taking my question. First question was in terms of R32 capacity how much capex are we doing in phase one that is 20,000 tons of R32 and what amount of capex are we doing for putting HF for this R32 capacity?
Bir Kapoor
Yes, meet. In fact in the last quarter call we had indicated a capex of around 150 crores. Okay. So we are still holding onto that capex and we’ll see how the capacity addition actually takes place with respect to how much we can add it and in our existing available capacities in the existing plants and how much we’ll have to build up the new. But the capex number probably would remain within the number that we have indicated.
Meet Vora
So does this include HF or this exclude this HF will be separate or.
Bir Kapoor
HF will be separate? No, this does not include hf.
Meet Vora
Sir, if you can give some sense on how much HF Capex we are.
Bir Kapoor
Doing HF capex is I think we have not yet announced. Okay. But I think HF is in the overall product capex but I don’t think we have specially specifically announced the product wise CapEx for HF.
Meet Vora
Okay, because I was asking this question is because we are planning to spend around 400 crores in FY26 in the standalone business. So maybe like around 200, 250 crores goes in R32 and balance 100, 150 crores goes in the fluoropolymers business. So just wanted to understand if we are seeing very strong growth in fluoropolymers business that is around 25 30% yoy, why are we not putting more capex in the fluoropolymers business? Overall.
Bir Kapoor
I think the capex is that we have indicated right now 1200 in EV and 400 in our existing business. The HF part is not included in the 400 of the. In fact I indicated some time back that 400 will primarily be a refrigerant as well as the fluoropolymers. Okay. And HF also is required in large quantities for our EV materials business. So HF capacity addition will go into our the capex that is shown for ev.
Meet Vora
Understood? Understood. And just on this again. So in terms of R32 demand how we seeing this? So we have a contracted volumes committed to us because we are planning to, you know preponed this commissioning and we are seeing strong demand side in this product. So if you can give some sense, how much aatri are we expecting to sell in say 26, 27? Some broad sense, broad ballpark number.
Bir Kapoor
Yeah I think you know we expect the demand to be strong and we have been in this business for quite some time. So as so we do not have yet the contract parts but however as the capacity will come up we will be looking at the global market for supply to global markets through our R32. Okay.
Rajiv Rao
And in terms of we were evaluating retrofitting some plants. So this will be R125 right? Or R22?
Meet Vora
We cannot answer that question. It will be, you know it’s something which is sensitive to us and we are looking at. Our intent is to bring the product to the market as fast as possible.
Meet Vora
Just one last bit on this EV side.
operator
Sorry to interrupt Mr. Meer, we will request you to rejoin the queue.
Meet Vora
Sure. Thanks.
operator
Thank you. We have our next question from the line of Archit from Noama Institutional Equities. Please go ahead.
Archit Joshi
Hi, good evening gentlemen. I have a few questions. So firstly on the LFP plant I think what you mentioned in the introductory remarks was that we are expecting to commission the production next month and I was wondering, given the current scenario of the gigawatt capacities that we have in India probably have 5 odd gigawatts with Ola and as per your competitor mentioned that you’re expecting a four to five more capacities in the next calendar year which 2026. So just trying to understand in the interim have we had any firm orders with any of These customers or the existing one because we are commencing next month.
I was just trying to get some cues from you about the ramp up and the order book that if we have any customer profiling that you can give on this account. Thank you.
Bir Kapoor
Yeah, thanks. Thanks Ajit. First of all, the company that you mentioned is yet not into lfp. The LFP powder material is used for lithium cell with LFP chemistry. The battery plant which has just started producing in India is in NMC chemistry doesn’t require it. So India LFP demand has still not picked up yet. There are, as I understand there are no LFP battery manufacturing plant in India as of now. So our focus to begin with is to market LFP outside India and we engage with multiple customers and they have also. So what we are planning to do is to look at LFP to supply into global markets.
Okay. Indian market of course is also our focus. But it will take some time for Indian markets to come into or demand on India to come into play.
Archit Joshi
Right sir. So out of the four parts that we have for the battery chemicals business, lfp, the salt, the electrolyte and the binder material out of which LFP and Lips 6 salt at least for now seems to be an export opportunity because like with, like I said before, for electrolytes particularly I think it’ll take some time. So for these two particular material could you have some ballpark numbers for us in terms of modeling as to what.
operator
Sorry to interrupt you Mr. We have the management link disconnected. Please stay on, stay connected. Ladies and gentlemen, we have the management back with us. Mr. Archit, please go ahead with the question.
Archit Joshi
Sir, I’ll repeat my question. Yeah sir, I was saying out of the four materials that we have dedicated to the battery chemicals business, LSP, the cathode material, the salt which is Lips 6 will at least be export oriented opportunities in the beginning because electrolyte, I’m assuming that maybe by next year we’ll see some amount of sales happening there. So for these two which we probably might want to explore, do we have any ballpark numbers for modeling as to how much revenue we can expect? Also an addendum to that if you could also help us with the current dollar realizations of LFP, Lips 6 Salt, the electrolyte and the binder material.
That will be really helpful if you can give up that data. Thank you.
Bir Kapoor
Thanks Achit, thanks for asking. Question. Unfortunately I’ll not be able to share the pricing numbers or the volumes because one of the things that we have indicated earlier that as these capex is as we get commissioned there will be a certain asset turnover which gives overall revenue in terms of of the guidance in terms of overall revenue for individual products. To give us pricing or the volume detail would be difficult as these are sensitive information and also some of the competitive confidential information for us.
Archit Joshi
Sure. So the first part of the question on the export opportunity, anything that you would might want to share that. And also if you could also just give us what would be your tax guidance for next year and why was tax rate so much lower in this quarter the depreciation also if you could. That would be my last question. Thank you.
Bir Kapoor
Yeah, thanks Archit. So first of all, of course these products would be primarily be catering to the US market. We already have engaged both on LFP as well as Lips 6 with customers. And we have a firm almost indication in terms of their requirements. So while lip F6, as I indicated earlier the qualification process is on in lfp. As soon as our plant gets commissioned we will be making the product as per the specification provided as and send it for qualification. So that process will get started. Coming back to your tax question. I have requested Manoj, please to answer that question.
Manoj Agarwal
Hi Sanjay. This is one. Our tax is lower in this quarter because of one time credit of reversal of deferred tax liability. Which has happened essentially because in the books of accounts when you any asset is there you have to create a defer tax liability at the rate of 25%. However when you do a sound sale of an undertaking it attracts a capital gain tax at the rate of 12.5%. So there is a delta of 25% and 12.5% which has essentially created a reversal of deferred tax liability to a tune of 29 crores in this quarter.
Archit Joshi
The tax guidance and on the depreciation also.
Manoj Agarwal
Same as previous quarters.
Archit Joshi
Sure, sure. Got it.
Bir Kapoor
Okay. Thanks Archit. Thank you. Thank you.
operator
Thank you. We have a last question from the line of Sanjeev Jain from ICICI Securities. Please go ahead.
Sanjesh Jain
Yeah, thanks. Thanks for taking my question again. I just got one question. On the specialty chemical business. We have seen sharp uptick for the peers. We have also indicated that we may see good numbers in FY26 at hand. We have put around 500 to 600 crores of capital in this business. What is the revenue we are looking at from this business ramp up and how should we see speciality from here on?
Bir Kapoor
Yes, Anish. As you know we have not made any new investments in this Flora specialty business. Okay. This has been what investment that we had made the Last investment was made almost three years back. And there our focus right now in that business is to optimize our product mix, try to get the maximum out of that business. So it’s not really a business where we are putting in lot of capexes. And we have said it openly now potential revenue, that kind of capex that we have invested can generate is purely based on the asset turnover guidance that we had given earlier.
So that’s all I can say for fluoro speciality. Sanjesh.
Sanjesh Jain
But why haven’t we seen any uptake this quarter? We have seen a good offtake for agrochemical.
Bir Kapoor
Yeah, it’s again offtake means that it doesn’t mean that our plants are not fully utilized. It also depends on the type of product mix one has. Okay. So we have certain stable mix of products which has been going on and that is what is continuing.
Sanjesh Jain
And this should see a material and.
Bir Kapoor
There’S some bit of growth of course. But it’s such a small portion, Sanjesh, of our overall portfolio that it will not be very much visible.
Sanjesh Jain
Got it. Got it. That’s it. Thank you, sir. Thank you very much.
Bir Kapoor
Thank you, Sanjish. Thank you so much for your interest.
operator
Thank you, sir. We’ll take our last question from the line of Naushat Chaudhary from Aditya Bella Sun Life Insurance. Please go ahead.
Naushad Chaudhary
Hi sir, follow up on Sanjay’s question. If you can share how much total capital so far we have deployed on specialty fluoro polymer business.
Bir Kapoor
Nachad. You’re asking about fluoropolymers.
Naushad Chaudhary
Yes, fluoropolymer. How much total capital so far? Cumulatively we have deployed here.
Bir Kapoor
I don’t have the figure offhand because this has been. Fluoropolymer business has been around because we had invested almost since 2008 in this business. And you know, I think we can take this question offline in terms of what is our current value of these investments.
Naushad Chaudhary
Okay, sure, sure. Thank you, sir.
Bir Kapoor
Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today and I now hand the conference over to the management for closing comments.
Bir Kapoor
Yeah, thank you so much. Nitin and I would like to thank you all for your interest in gfl. I would like to reiterate that our growth story which is driven by our current core business of fluoropolymer continues. We expect to see growth in this coming year. In FY26, I have already indicated a number that we expect to see almost 25% growth primarily driven by new fluoropolymers where we had invested we have capacities and now we’ll probably see the growth coming in the other areas and very strong pillar for us is battery chemicals and the battery materials.
We are reaching a level of maturity where we have all the plants now in this year will be at commercial scale and the samples produced from these plants are at advanced stage of qualifications which is one of the criteria which is required for battery materials where the product from the final plant goes for qualifications. So we are at that last stage. So we expect this business also to kick off and as the market grows in FY27 and FY28 we expect this business to be a very strong growth story for gfl. So with this I would like to thank you all for your interest and we look forward to a very strong FY26 going forward.
Thank you.
operator
Thank you sir. On behalf of DAM Capital Advisors. That concludes this conference. Thank you for joining us and you may now disconnect your lines.
Bir Kapoor
Thank you.