Ladies and gentlemen, good day and welcome to the Gujarat Fluorochemicals 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 concludes. 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 Agrawal from DAM Capital Advisors. Thank you, and over to you.
Thank you, Manu. Hi, good afternoon, everyone, and a very warm welcome to Gujarat Fluorochemicals Limited , Conference Call, hosted by DAM Capital Advisors Limited. On the call today, we have representing Gujarat Fluorochemicals 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 Gujarat Fluorochemicals Management team to take the call forward from here on. Please go ahead, sir.
Thank you, Nitin. Good afternoon, everyone, and this is Bir Kapoor. A very warm welcome to all of you for GFL quarter four FY2025 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 FY2025 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 business operations and outlook. I'm pleased to share that for the quarter, we have reported revenue from operations of INR 1,225 crore, reflecting an 8% increase year-on-year.
Our EBITDA grew significantly by 28% to INR 305 crore, with margins improving from 25% to 25% from 21% in the same time last year, which is quarter four FY2024. Our consolidated PAT nearly doubled, reaching INR 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 of 31st March 2025, has come down to INR 1,451 crore, as compared to INR 1,769 crore, as of 31st March 2024, resulting in an improvement of net debt to 53.3%.
Sorry to interrupt, sir. Sorry to interrupt. Your voice is breaking a bit. Can you just repeat your last sentence?
Our net debt on 31st March 2025 came down to.
Sorry?
Can you hear me, Nitin? Is that okay?
No, sir.
Still breaking?
Yeah.
Okay. So it's—can you hear me?
Also, it's quite breaking.
Is it better now?
No, sir.
Still not better?
No.
I will have to—can you call me back then, please?
Sure, sir. Sure.
Okay.
Ladies and gentlemen, the management line is disconnected. We will 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.
Thank you. Thank you, Nitin. I'm sorry for the disturbances. As I was saying, our net debt, as of 31st March 2025, has come down to INR 1,451 crore, as compared to INR 1,769 crore, as of 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 the next few quarters. We have increased production of fluoropolymers and battery materials to build up the pipeline, and we expect this to normalize in the next one to two quarters. The 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 this segment ramps up.
Now, let me briefly take you through the performance of each business segment for the quarter. In our fluoropolymers business, revenue growth was primarily driven by volume increase in new fluoropolymers. Prices remained stable across domestic as well as global markets. FCM volumes are steadily rising as new project approvals are under progress. Growing demand from automotive, semiconductors, electric vehicles, and energy storage systems 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 the 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 and 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 FY2026. We are also working on multiple options to initiate the commissioning of R32, planned 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 Dahej, CMS-1 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 coming quarters. Overall, the 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. GFCL EV holds the first-mover advantage as a non-Chinese global supplier in the battery materials space. We continue to make rapid strides in building this business on strong fundamentals and establish ourselves as a three-global supplier with a wide range of products. Our LiPF6 salt production has stabilized, meeting stringent global specifications, with strong customer interest driving the potential market demand. We are moving ahead with phase II and phase III capacity expansion plans in FY2026. Our LFP plants have achieved mechanical completion, with commissioning and trial production set to begin next month.
We have also established pilot plants and R&D capability to develop new grades and wide product range in this product category. Our electrolyte and binder plants are also at the 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 U.S., EU, Korea, Japan, and India. Demand for our products 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 the rise of AI-powered data centers. The global battery materials market remains promising. Despite some reported delays, the U.S. continues with ambitious capacity expansions, while Europe's EV and battery production capacity is set to grow substantially, reaching nearly 800 gigawatt-hour by 2030.
Domestically, capacity announcements exceed 300 gigawatt-hour, offering a large addressable market for us in both ESS as well as EV sectors. We have announced CapEx of INR 1,600 crore for FY2026, with INR 1,200 crore earmarked for GFCL EV, largely towards increasing the current capacities with increased customer approvals and audits in place, and INR 400 crore for GFL, largely earmarked for fluoropolymers and refrigerant business. To summarize, the fluoropolymers segment will benefit from high-value product adoption. Fluorochemicals will see improved pricing and demand in FY2026, 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.
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 touchstone 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 Sanjesh Jain from ICICI Securities. Please go ahead.
Yeah, good afternoon, sir. Thanks for taking my question. Hi, sir. First set of questions on the increased working capital on fluoropolymers and battery chemicals. You said that we have built a good inventory in the anticipation of rising demand in the first half of fiscal year 2026. Do we have a confirmed order, or do you think it's more of an anticipation and projection which is leading to a bump up in the inventory level at our end?
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 materials as well, we have long-term projected demands given to us by our customers, and in that anticipation, we are building up the pipeline.
When you 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?
The way it works is that typically, once our customer engagement starts, both things go in parallel: the commercial discussions, which essentially indicate what material that we can supply with what quantities, and also projections of the potential pricings. The qualification also moves parallelly because these are long-term contracts, Sanjesh. In these, our capability to provide certain quantities in the long term is a key aspect of our customer engagement and contracts.
Why to make material in so much advance if it is not progressed?
Let me, I think, it's not that we are making too much material in advance. This is, for example, in case of fluoropolymers, as you are aware, we are doing stock and sell in the U.S., and we have warehouses and depots in North America as well as Europe. Considering the transit time from here to the U.S. and building up the capacity in terms of anticipation of the sale, 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.
Got it. Got it. My second question is on the CapEx of INR 1,600 crores, particularly INR 1,200 crores on the EV side. I thought that we will do more CapEx based on the customer orders, and it will be made to order kind of a situation. Why are we going ahead with the phase II, phase III kind of capacity addition where we are ready to sign a long-term contract?
We already have anticipated demand and the projected demand from our customers, and because the capacity building takes a long time, Sanjesh. Okay. See, the way in fact, I've said it many times that in our EV material business, we initially started with commercially viable size. Okay. We are now building up. Once we have demonstrated the capability to produce a high-quality material which is benchmarked at the world quality, now we are building up the capacities and adding up the volumes.
Okay. And.
It's happening as per the plan. We already had planned the phase II, phase III capacity additions. We started with LiPF6 plant, LFP plant, demonstrated, customer has approved, visited our sites, and now, in order to fulfill the projected demands, we need to build up capacity.
We need to say to assume that because LFP is actually stabilized, all this INR 1,600 crore is largely towards LiPF6 and electrolytes?
Not really. Because if you look at our product portfolio, we have LiPF6, we have binders, we have LFP, and we have electrolyte. Also, in case of salt, we also have backward integration to make LiS and also high-purity HF. These CapEx involve the overall bouquet of products as well as the backward integration.
See, there is so much demand we anticipate for fluoropolymers and battery chemicals. Do we have enough HF, and it becomes a bottleneck for us?
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.
When did you announce that? Sorry, I missed it.
Last time, we said that when R32 and HS, we will probably be adding both the capacity.
Okay. So it will come along with the R32 capacity.
Right.
My next set of questions is on the guidance. Besides we want to achieve INR 30,000 crore kind of an addition in FY 2026, the start appears to be much slower, or the end for FY 2025 appears to be much slower than probably what we would have desired, which would have given us the line of sight for this. Sitting at INR 306 crore quarterly, we are anticipating INR 500 crore quarterly and exit probably above INR 600 crore, which is almost 2x the exit cost. Are we still feeling confident on those guidance?
Yeah, we are. I mean, fluoropolymers, what we are seeing the traction right now, we expect to see almost 25% growth in fluoropolymers from where we are today. We will see a gradual growth in fluoropolymers as we go along. This we have said earlier, and we are seeing it again, saying it again. We would continue to see growth in our core business, which is fluoropolymers.
Martin, again.
Sorry to interrupt, Mr. Sanjesh.
Yeah, I will get back to you in the queue.
Yeah.
Thanks, Bir Kapoor, for answering all those questions so patiently and respectfully for the time you've gotten.
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 yourselves 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 B&K Securities. Please go ahead.
Thanks for the opportunity, and congrats to see that margins have expanded and while our numbers are being pretty good. First question is on fluoropolymers. Last time, you had indicated that we will be able to optimally utilize the fluoropolymers capacity by end of FY2026. Just now, you also alluded that we have relatively good visibility on the scale. When we are talking about the INR 400 crore of CapEx on the legacy business, does this also include fluoropolymers? Because beyond FY2026, if we are optimally utilizing, we will need additional capacity to cater from FY2027 onwards. Just your thoughts on this. Thank you.
Yes. Yes, Rohit. Thanks. Exactly. That is what our plan is, that the INR 400 crore CapEx that we are planning in GFL will primarily cater to fluoropolymers because there will be some amount of capacity addition, balancing, debottlenecking, which will happen as we go along. Okay. I have already stated that earlier, a 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. We are taking into account our future business. This is what we intend to do in this coming year, spend part of the INR 400 crore in fluoropolymers.
Got it, sir. Sir, a 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 FY 2026? Obviously, that will further scale up in FY 2027.
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 fully grown business. Nevertheless, we expect the ramp-up to continue and pick up in FY 2027.
Sure. I'll get back into the queue. Thanks a lot, and all the best.
Thanks, Rohit.
Thank you. We have our next question from the line of Arun Prasad from Awendas Park. Please go ahead.
Thanks for the opportunity and good evening, sir. First question is on the incident battery chemicals, EV materials. We have kind of indicated INR 1,200 crore of CapEx in 2026. Of that, INR 1,000 crore will be from the funding division, and the rest of the INR 200 crore from the internal accruals. This INR 200 crore is operating cash flow generated by the EV business, or is it a leftover inflation from the previous years? How should we see this?
See, this INR 1,200 crore that we are saying is the cash flow out that will happen this year in CapEx for EV business. Okay. This will be, of course, in continuation to whatever the project that we had started. There will be some more new projects that will be added as we go along. I do not think we have said that there will be a split in terms of accruals or outside. The EV business, 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 will be funding it through external fundraising.
No, sir, we have mentioned it is self-funded. The rest of the CapEx will be mentioned as self-funded by EV business. That is why the question is.
No, sir. Sorry, I just want to.
Let me get Akhil on line here. Akhil is our CFO. Please.
I think what you mentioned in the last three, four conferences is that the funding will be done from external sources without relying on the internal cash flow of GFL. This is what we did in FY 2025. If you see, the entire CapEx of almost INR 700 crore is funded out of the equity raise in September, October of last year. We raised INR 1,000 crore last year, which has funded the CapEx here. We 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 GFL. That has been our stated position for the last six to nine months, and that continues to be.
Okay. Understood, sir. Second, when we are saying that we will be getting some revenue trickling in from the EV business, I have to assume that first it will be from the fluoropolymers because at least in the salt and the electrolytes, we still do not get the local customers or our overseas customers giving the orders. Fluoropolymers will be the main contribution even in the EV business?
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. You are right. I mean, there will be a combination of the two. I will not say it is only fluoropolymer. It is both because both are very close to getting commission.
Right. Right. Sir, finally, one question on the PTFE and the fluoropolymers. 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, as well as pricing is in, say, at the bottom of the cycle or in the top of the cycle or in the middle, trending upwards or downwards? Some color on this would be helpful.
Yeah. Thanks, Arun. I'll request Mr. Kapil Malhotra, who's the Business Head of Fluoropolymers, who takes it.
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 higher value-added grades, which is a constant with us. 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 margins, which are improved. Coming to SKM and PSA, in SKM, we are also because SKM is kind of a business where there are new projects which are constantly under approval. Quarter- by- quarter, we are improving our business volumes. In SKM, 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. 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 going. Also, one of the legacy players has moved out. That benefit also, we have started seeing, and we'll subsequently start seeing in the next quarters also.
Okay. We are seeing the benefit in terms of pricing or volume? Because I do not see much benefit in terms of pricing because of the legacy players.
See, pricing, we are always at par with the other players. 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. Even volumes will also keep on increasing from next quarter onwards further.
Understood. So 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 quarters as well?
Which?
Sir, so it will come next year. Manoj, you want to add that?
Yeah. Part of the commissioning has happened, and part will be in this financial year, 2026.
This is only very in the early stages. We still think more than 60%-70% of the benefit is sector. That's the right understanding?
Yes. Yes.
Okay. All right. Thank you. All the best, sir. Thank you very much.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Naushad Chaudry from Aditya Birla Sun Life Insurance. Please go ahead.
Thanks for the opportunity. A few clarifications. First, on the EV chemical business, in the last two, two and a half years, 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 pattern or whatever metrics we follow from a CapEx requirement pattern for this business?
Naushad, thanks, Naushad. Obviously, there have been some changes in the global market because of the tariff situation, etc. Of course, I think what we are referring to is the overall battery material prices in China have dropped down significantly. Okay. 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 pricing and the pricing premium that we can command over China. Our business plan and CapEx were based on that situation.
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're talking about. Almost three years back, they were high. I think last one and a half years 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. Our CapEx plan, our business model, and the predicted business financials, we have already accounted for what you see in the market today. Coming back to your CapEx part, 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.
What, for example, the plant is costing, for example, in China, our target is when we reach the full commercial scale capacity addition, these will reach the same level of benchmarks.
Oh, I'm sorry. Actually, my question was basically because the metrics is changing for the industry. It was the 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?
No. If you talk about the industry, again, I would emphasize there are two sets of industries. One is within China, and another is outside China. Okay. Outside China, there have not been very significant capacities of salt, for example, or for LFP, for that matter. Outside China, capacity is being added and it's built, with GFL being one of the leading players. Our benchmarks of the CapEx are still the same. Outside China, these materials have not really developed yet. It's still at a very, very early stage. Most of the development in terms of capability has happened within China. Outside China, it's at a very, very early stage. Do I answer your question?
Yes. So excluding ex of China, nothing much has changed in terms of CapEx requirement.
Correct. Absolutely. Absolutely.
Okay. Second question on this, if you have to highlight a few key risks to the EV project business, what would that be?
See, in terms of 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. In terms of risk, if I see, it's in terms of timing how these eventually grow. Fundamental, that whether we will be able to reach, for example, in India, 300 gigawatt hours or not, I don't think we see that as a big risk at the moment.
Okay. Overall, working capital cycle for this business versus this would be similar, or would there be any difference?
We expect it to be similar because in this case, it's also since our target market is a big chunk of that is outside India. We will have to be supplying material to the US. For example, there will be material which will be on the high seas. We will have to maintain a certain level of stocks. We should be very similar to our fluoropolymers, Naushad.
Sure. All the best. Thank you.
Thank you. Thank you.
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.
Yeah. Hi, sir. Thanks for the opportunity. First question on the fluoropolymers side. Early themes, sort of a 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?
It's largely from Ankur, is 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. This is exactly the way it is progressing now. It's happening in new fluoropolymers.
Sure. As you highlighted in one of the earlier comments, the consolidation among the global players, the benefit from that, is it yet to come in, or have we already started seeing some benefit in Q4, the volume, that growth?
Some of it has trickled in, but we expect to see a lot more because one of the legacy players stopped their production a few months back, December only, and they were pipeline. We have started seeing traction now. There is another legacy player who has relocated and stopped the production in Europe. A lot of it we expect to see, I think, in quarters to come. I suppose, please.
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 on the pipeline. They are expected to finish off by this quarter end. We expect, as the customers are giving us indication, the subsequent quarters, these volumes should grow up in replacement of the products which are being supplied by these legacy players.
Sure. Possibly a step-up jump there maybe in the, to coming in. Fair. Just a second bit on the battery chemical side. While you highlighted that 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 cost competitiveness in salt, binders, and other products vis-à-vis not only China, but let's say non-Chinese vendors. Pricing you did highlight, but overall on the offering side.
If we look at among our non-Chinese players, I think we are one of the most competitive in terms of not only capability to supply, add capacity, and give quality. If you look at binder, which is fluoropolymers, of course, we have been around in this business for a very long time. We are barely at the benchmark in terms of quality as well as capability. In salt as well, in the last one year since we got it and started optimizing and stabilizing our plant, I am 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.
Sure. 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. Yes.
Would that be a fair assumption?
Yes. That's a fair assumption.
Okay. Great, sir. Thank you and all the best.
Thank you. We have our next question from the line of Dhruv Muchhal from HDFC Securities. Please go ahead.
Yes, sir. Thank you so much. Sir, on the R22 price trend, so prices are positive, but any implication from the quota cut volumes, or it's more than offset by the pricing benefit? Hello?
Yes, Dhruv. I think yes, it will offset. At the same time, if I look at my entire segment, we will, of course, be adding R32 as well. If I look at it overall, refrigerant segment is expected to grow overall. In spite of the quota cut in R22, the pricing will, of course, more than compensate for it. In addition, as we will be adding R32, our overall refrigerant portfolio is expected to grow.
Sir, on R32, the timeline remains by end of FY2026, is it?
We are trying to see how we can expedite to come to the market. We are looking at various options, including retrofitting. Let's see. Our target is to bring the product by the second half of this year, this financial year.
Okay. You're trying to prepone it further?
Yes.
Oh, okay. Okay.
Looking at the market opportunity, we are looking at how best we can prepone it and bring the product to the market.
Sir, then is it fair to assume the full run rate volumes of 20,000, I think what you're planning, 20,000 if it's the number, that happens from the end of FY2026, or can it be also earlier? I mean, the retrofitting can give you all the volumes, or it will be gradually only?
It of course depends on how the market ramps up. Our target, of course, is FY 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. It will be the combination of the two. However, the target is 20,000. We are holding on to that target.
Sir, sorry, quick two questions. 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 INR 1,500 crore-INR 1,600 crore as of March, a reasonably sizable number. So some sense of what this CapEx is relating to?
Yes. I'm requesting Manoj Agrawal to.
INR 150 crores.
Please, Manoj.
Yeah. As we indicated earlier also, the total saving will be in the tune of INR 120 crore-INR 150 crore on an annualized basis. That will trickle in partly this financial year and based on the SM and the facilities comes up.
Because this quarter itself, we see a delta of about, if I'm not wrong, INR 30-odd crore.
Yeah. That is on account of our shutdown, which has happened due to the incident which has happened in the CMS-1 plant. Our Dahej and CMS was shut down for 15 days. That has delta because of that, not because of the saving.
Oh, okay. Got it. And sir, on the CWIP?
Pardon?
The CWIP number, INR 1,600 crore we have as of March, that pertains primarily for?
I think as we talked about that, some of the reason we expect that the working capital to normalize in terms of number of days.
Sir, referring to the capital work in progress, the fixed assets that we have.
No, it's the capital work in progress that depends on all the projects whenever it gets completed and commissioned and then capitalized in the books of accounts. What management is more interested in giving you guidance upon is the cash flow perspective, how the CapEx will pan out in this next financial year. CWIP will take an accounting course.
No, I'm wondering, the INR 1,600 crore, 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. It consists of batteries also. Yeah.
It includes batteries.
It includes battery business.
Okay. Sir, some specifics would be helpful, but probably I'll take it offline. Thank you so much. All the best.
Yes. Thanks. Thank you, Dhruv.
Thank you. We have our next question from the line of Arun, an individual investor. Please go ahead.
Thank you for the opportunity. Sir, I have two questions. The first one was coming to the overall EV market. Where is it that you see positive spots? If I were to compare Europe and U.S., where do you see more confidence from your customers? How are you looking at these different export markets that you're targeting?
Yeah. I think we are looking at, I think we have indicated a number of times that one of the markets that we are focusing on is the U.S., where we expect to see very large growth, much more than the EU. I'll anyway request Rajiv to add. Rajiv?
Yeah. This is Rajiv here. Our focus markets for our EV products are going to be U.S. and India. In the U.S. markets, it would be U.S. companies as well as the Koreans and Japanese companies who have a significant play in the U.S. markets. While we look at going into the U.S. markets, we are in touch with companies in U.S., Japan, and Korea. The next market is the India market, which is just starting with a few OEMs getting ready to start their plants. India is the second market that we are focusing on. We have good confidence in both U.S. and India markets as well. Europe is also starting off. We have been in touch with customers, validated some of our binders, also sampled our electrolyte salts. That is also going on. U.S., India, Europe.
Those are the three markets.
Yeah. Europe has been slightly behind compared to U.S. and India.
Okay. Sir, and you don't see any particular major headwinds from the recent administration moves and policies?
Not really. In fact, on the contrary, we see that as a positive because one of our premises is that we provide an alternate supply chain. Whatever that we are seeing, of course, it will take several months to fully stabilize and unfold what the tariff situation will be. Nevertheless, if I look at the differential, there will always be an advantage from India side, or supplier who's from India.
Okay. Sir, and lastly, I think you mentioned earlier in the call that you're expecting to deliver about INR 2,000 crore EBITDA for FY 2026. Did I hear that correctly?
I don't think we said that, INR 1,000 crore. We expect, of course, but we have never given this number in the conference.
Okay. Sir, I mean, INR 1,000 crore.
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 fluoropolymers segment, which we expect to achieve almost 25% growth year on year or higher than that. We have also said growth will come in refrigerants, which will primarily be because, of course, new product being added. Okay. This is what we have indicated.
Okay. Understood. Thank you. Thank you so much.
Thank you. We have our next question from the line of Meet Vora from Emkay Global. Please go ahead.
Yeah. I thank you 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?
Yes. In fact, in the last quarter call, we had indicated a CapEx of around INR 150 crore. Okay. We are still holding on to that CapEx, and we will see how the capacity addition actually takes place with respect to how much we can add in our existing available capacities in the existing plants and how much we will have to build up the new. The CapEx number probably would remain within the number that we have indicated.
Sir, does this include HF, or this excludes HF? HF will be separate, or?
HF will be separate. This does not include HF.
Sir, if you can give some sense on how much HF CapEx we are doing?
HF CapEx is, I think we have not yet announced. Okay. I think HF is in the overall product CapExes. I do not think we have specifically announced the product-wise CapEx rate.
Okay. I was asking this question because we are planning to spend around INR 400 crore in FY2026 in the standalone business. Maybe around INR 200 crore-INR 250 crore goes in R32 and the balance INR 100 crore-INR 150 crore goes in the fluoropolymers business. I just wanted to understand if we are seeing very strong growth in the fluoropolymers business, that is around 25%-30% YoY . Why are we not putting more CapEx in the fluoropolymers business overall?
Meet, I think the CapEx is that we have indicated right now, INR 1,200 crore in EV and INR 400 crore in our existing business. The HF part is not included in the INR 400 crore of the in fact, I indicated some time back that INR 400 crore will primarily be 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 the CapEx that is shown for EV.
Understood. Understood. And just again, sir, in terms of R32 demand, how have you seen this? We have contracted volumes committed to us because we are planning to prepone this commissioning, and we are seeing strong demand side in this product. If you can just give some sense how much R32 are we expecting to sell in, say, 2026, 2027, some broad sense, broad ballpark number?
Yeah. I think we expect the demand to be strong, and we have been in this business for quite some time. We do not have yet the contract part. However, as the capacity will come up, we will be looking at the global market for supply to global markets through our R32.
Okay. In terms of we were evaluating retrofitting some plants, this will be R125, right? Or R22?
We cannot answer that question. It is 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.
Sure. Just one last bit on this EV side.
Sorry to interrupt, Mr. Meet Vora. We will request you to rejoin the queue.
Sure.
Thank you. We have our next question from the line of Archit from Nuvama Institutional Equities. Please go ahead.
Hi. Good evening, gentlemen. I have a few questions. Firstly, on the LFP plants, I think what you mentioned in the introductory remarks was that we are expecting to commission the production next month. I was wondering, given the current scenario of the gigawatt capacities that we have in India, we probably have 500 gigawatts with Ola. As per your competitor, they mentioned that they are expecting four to five more capacities in the next calendar year, which is 2026. I am just trying to understand in the interim, have we had any firm orders with any of these customers or the existing one? Because if we are commencing next month, I was just trying to get some cues from you about the ramp-up and the order book, if you have any customer profiling that you can give on this account. Thank you.
Yeah. Thanks. Thanks, Archit.
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. It does not require any. India LFP demand has still not picked up yet. As I understand, there are no LFP battery manufacturing plant in India as of now. Our focus to begin with is to market LFP outside India. We have engaged with multiple customers. What we are planning to do is to look at LFP to supply into global markets. Indian market, of course, is also our focus, but it will take some time for Indian markets to come into or demand from India to come into place.
Right. 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 LiPF6 salt, at least for now, seems to be an export opportunity because, like I said before, for electrolytes particularly, I think it will take some time. For these two particular materials, could you have some ballpark numbers for us in terms of modeling as to what the sales demand?
Sorry to interrupt you, Mr. Archit. We have the management line disconnected. Please stay connected.
Sure. Ladies and gentlemen, we have the management back with us. Mr. Archit, please go ahead with the question.
Sure. Sir, I'll repeat my question. Sir, I was saying out of the four materials that we have dedicated to the battery chemicals business, LFP, the cathode materials, the salt, which is LiPF6, 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. For these two, which we probably might want to export, do we have any ballpark numbers for modeling as to how much revenue we can expect?
Also, in addendum to that, if you could also help us with the current dollar realization of LFP, LiPF6 salt, the electrolyte, and the binder material, that will be really helpful if you can give us that data. Thank you.
Thanks, Archit. Thanks for asking the 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 is that as these CapExes, as we get commissioned, there will be a certain asset turnover, which gives overall revenue in terms of the guidance in terms of overall revenue. For individual products to give us a pricing or the volume detail would be difficult as these are sensitive information and also some of the competitive confidential information for us.
Sure. The first part of the question on the export opportunity, anything that you might want to share that? Also, if you could 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.
Yeah. Thanks, Archit. First of all, of course, these products would primarily be catering to the U.S. market. We already have engaged both on LFP as well as LiPF6 with customers, and we have a firm almost indication in terms of their requirements. Okay. While LiPF6, as I had 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 and send it for qualification. That process will get started. Coming back to your tax question, I have requested Manoj, please, to answer that question.
Hi, Ranjit. This is one time.
Archit.
Sorry. Our tax is lower in this quarter because of one-time create of reversal of deferred tax liability, which has happened essentially because in the books of accounts, any asset is there, you have to create a deferred tax liability at the rate of 25%. However, when you do some 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 is a reversal of deferred tax liability to a tune of INR 29 crore in this quarter.
The tax guidance and on the depreciation also?
Yeah. It's the same.
Same as previous quarters.
Sure. Sure. Got it.
Okay. Thanks, Archit. Thank you.
Thank you.
Thank you. We have our last question from the line of Sanjesh Jain from ICICI Securities. Please go ahead.
Yeah. Thanks. Thanks for taking the question again. Just one question on the specialty chemical business. We have seen sharp uptick for the peers. We have also indicated that we see good numbers in FY2026. At some time, we have put around INR 500 crore-INR 600 crore of capital in this business. What is the revenue we are looking at from this business? Example, and how should we see specialty from here on?
Yes, Sanjesh. As we have not made any new investments in this fluoro-specialities business. Okay. This has been what investment that we had made. The last investment was made almost three years back. Our focus right now in that business is to optimize our product mix, try to get the maximum out of that business. It is not really a business where we are putting in a lot of CapEx, 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. That is all I can say for fluoro-specialities, Sanjesh.
Why haven't we seen any uptick this quarter when we have seen a good uptake for agrochemicals?
Yeah. Again, uptake means that it does not mean that our plants are not fully utilized. It also depends on the type of product mix one has. Okay. We have certain stable mix of products, which has been going on, and that is what is continuing. Okay.
This is pure material.
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. Okay.
Got it. Got it. That's it. Thank you, sir. Thank you very much.
Thank you, Sanjesh. Thank you so much for your interest.
Thank you.
Thank you, sir.
We'll take our last question from the line of Naushad Chaudry from Aditya Birla Sun Life Insurance. Please go ahead.
Hi, sir. Follow-up on Sanjesh's question. If you can share how much total capital so far we have deployed on specialty fluoropolymer business.
Nawshad, you're asking about fluoropolymer?
Yes. Fluoropolymer. How much total capital so far cumulatively we have deployed here?
Archit, I don't have the figure offhand because this fluoropolymer business has been around because we had invested almost since 2008 in this business. I think we can take this question offline in terms of what is our current value of these investments. Okay.
Sure. Thank you.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Yeah. Thank you so much, Nitin. 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 FY 2026. I have already indicated a number that we expect to see almost 25% growth, primarily driven by new fluoropolymer where we had invested. We have capacities, and now we will 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, we'll 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. We are at that last stage. We expect this business also to kick off. As the market grows in FY2027 and FY2028, we expect this business to be a very strong growth story for GFL. With this, I would like to thank you all for your interest, and we look forward to a very strong FY2026 going forward. Thank you.
Thank you, sir. On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your line.
Thank you.