Shares of Gujarat Fluorochemicals Ltd.ended with gains of over 6% on Wednesday, January 29, after it anticipated a further rise in the prices of refrigerant gas prices, particularly the R-22. The commentary from the management also sent shares of SRF and Navin Fluorine higher by up to 5%.

“Overall refrigerant gas prices, mainly R-22, have marginally improved during the quarter, with further pick up expected going forward. For R-125, which is primarily exported to the US, Q3 is a seasonally weak quarter. However, both prices and volumes are expected to improve going forward,” Gujarat Fluorochemicals said in its investor presentation post its December quarter results.

The company also said that specialty chemical volumes are likely to pick up from the March quarter, although they remained flat during the quarter.

Gujarat Fluorochemicals reported a 57.5% jump in its net profit for the December quarter to ₹126 crore. The company had reported a bottomline figure of ₹80 crore during the same quarter last year.

The company’s revenue grew by 15.7% on a year-on-year basis to ₹1,148 crore. Its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) grew by 42.7% to ₹294 crore, while margins expanded by nearly 500 basis points from last year to 25.6% from 20.8%.

Gujarat Fluorochemicals is the largest R-22 producer in India.

Brokerage firm Equirus in a note earlier this month had said that every $1 per kilogram change in realisations of the R32 refrigerant could increase SRF’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) by ₹260 crore.

Similarly, every $1 per kilogram change in realisations of the R32 gas can improve Navin Fluorine’s EBITDA by ₹77 crore.

SRF has an overall capacity of 29,000 to 30,000 tonnes of the R32, while Navin Fluorine has close to 4,500 tonnes. The latter also expects to add another 4,500 tonnes of capacity of the R32 by next month.

SRF also has a capacity of nearly 7,000 tonnes for the R125.

The R32 refrigerant is used in air conditioning and low-temperature refrigeration systems. It absorbs heat and creates cool air. Similarly, the R125 is also used in air conditioning, refrigeration and other industries.

Shares of Gujarat Fluorochemicals ended 5.6% higher on Wednesday at ₹3,536. Shares of SRF ended 2.2% higher at ₹2,657, while those of Navin Fluorine ended 5% higher at ₹3,740.