GUJARAT FLUOROCHEMICALS

Till a couple of years ago, the company was recognized as India’s largest producer of Refrigerant Hydrochlorofluoro carbons where around 50% of its production was for captive consumption for making PTFE and the rest was sold in the open market. But today, its entire business profile has changed. Today, it has four verticals, chemicals which are refrigerant gases and rest; then there is Wind Turbine Business which is manufacture and selling of wind turbine generators and installing and maintaining the same. Third is Wind Power Generation business which is generation and sale of power. Fourth vertical is theatrical exhibitions, which is operating and managing multiplex cinema theaters. From gases, today, its biggest contributor is Wind Turbine Business, with major portion of its earnings coming from making wind turbine machines.

The company did not do too well in Q2FY17. Its consolidated net sales dropped 13% (YoY) at Rs.1524 crore. Costs were down 10% led by a 30% drop in raw material costs and 11% drop in excise duty outgo. EBITDA was down 30% at Rs.271 crore and margins fell from 19.21% to 17.54%.  An exceptional gain of Rs.7 crore (sale of majority stake in JV to Chinese company) and 49% lower tax outgo helped rein in the fall in net profit, which came in at Rs.90 crore, down 18%.

 The vertical of Wind Turbine Business, under the name of Inox Wind is its mulch cow – contributing 51% to total income but it was down 24% and EBIT was down 34%. earned and 64% of total EBIT. Its other big earner is the Theatrical Exhibition, which is post takeover of Inox and now Satyam Cineplexes, contributing19% to revenue which was down 4% and EBIT fall at 83% was very sharp. Chemical segment, contributing 24% to topline showed a 7% rise in revenue but EBIT was down 16%. Power I the only segment which did well – revenue rising 28% and EBIT up 36%. But with three of its bigger verticals showing a decline, the fall in net profit was a given.