SRF and Navin Fluorine stocks soared over 12% on January 9, driven by reports of a significant price hike in refrigerant gases in the US. The rally marked the third consecutive session of gains for both stocks, sparking fresh enthusiasm in the share market investment space. At 9:46 AM, Navin Fluorine was trading at ₹3,887.90, just below its 52-week high of ₹4,017.10, while SRF's shares were priced at ₹2,636.95 on the NSE.
Impact of US price hike on earnings
US gas distributors have raised refrigerant gas prices, with iGas USA announcing increases of up to 200% for R32 and R125 gases due to supply constraints. Analysts suggest that a $1/kg rise in R32 realisations could boost SRF's EBITDA by ₹260 crore and Navin Fluorine's by ₹77 crore. Both companies are leading players in the refrigerant gas market, making this development a significant catalyst for their share market investment appeal.
Capacity expansion and long-term growth
SRF's R32 production capacity stands at 29,000-30,000 tonnes, complemented by 7,000 tonnes for R125. Navin Fluorine, with an R32 capacity of 4,500 tonnes, plans to double its output in February, which could further solidify its market position. This price hike offers respite after two years of sluggish demand and increased Chinese competition.
Summing up
The refrigerant gas price hike in the US has sparked a robust rally in SRF and Navin Fluorine stocks, cementing their potential as lucrative share market investment options. As of January 9, 2025, at 11:31 AM, SRF Ltd's shares soared by 13.8% to a day's high of ₹2,678.95 on the BSE, while Navin Fluorine International's shares surged 13.9% to ₹3,974.15. With growing demand and capacity expansions, these speciality chemical giants are poised for stronger financial performance.
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