Given the strong domestic demand and significant export potential, analysts at Nuwama Research contend that domestic producers of refrigerant gases (SRF, GFL, NFL) are in a strong position. Additionally, since domestic producers benefit from ADD on Chinese imports, exports are anticipated to increase. advantages from the level. American cost structures and high demand everywhere.
“We think that even as Europe transitions away from HCFCs and HFCs, domestic demand will remain high, resulting in strong margins for manufacturers. Due to its R&D-driven competence in blends and refrigerant gases like HFOs, backward integration, and export exposure, SRF (BUY) is the strongest player in refrigerant gases and has the potential to sustain future growth. According to the brokerage report, players like GFL (BUY) and NFL are set to gain from capacity expansions in the near future.
Given the robust domestic demand and promising export prospects, the brokerage firm feels that domestic producers of refrigerant gases (SRF, GFL, NFL) are in a great position. Due to an increase in realisations, profitability is also projected to remain consistent. Its top recommendations for refrigerant gases are Gujarat Fluorochemicals Ltd. or GFL (BUY) and specialty chemical stocks SRF (BUY).
“Due to the anticipated phase-out of HCFCs and the high level of demand, local manufacturers are quickly increasing capacity before the imposition of new capacity restrictions by CY23. “All fluorine-based players, including SRF, GFL, and NFL, have capacity growth plans, despite the fact that SRF has unchallenged leadership in R-32 and is the only player,” according to Nuwama Research.
Realizations are thought to be under pressure due to the rising level of competition and potential oversupply scenario by participants like the GFL and NFL. Players may avoid a price war and so maintain profitability if pricing restraint is combined with consistent demand (exports and import substitution), the brokerage stated.
The views and recommendations given above are those of individual analysts or broking companies and not of O2help.
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