Alufluoride expansion raises capacity to 24,000 tonnes

Alufluoride completed an expansion in June 2026 that raised annual Aluminium Fluoride capacity by one-third to 24,000 tonnes from 18,000 tonnes, while capital work-in-progress fell Rs 20.7 crore and net property, plant and equipment increased Rs 27.9 crore by September 2026.

How did Alufluoride's expansion change plant capacity?

Alufluoride increased annual Aluminium Fluoride capacity to 24,000 tonnes from 18,000 tonnes, adding 6,000 tonnes through the final expansion phase commissioned in June 2026. The additional capacity at its Visakhapatnam plant was available for the full second quarter of fiscal year 2027, or Q2FY27.

The new capacity became available during a recovery from a feedstock disruption, rather than alongside a disclosed utilisation measure. Hydrofluosilicic acid, or FSA, supply constraints disclosed on 23 May 2026 ended after the supplier reported resolution on 15 July 2026, and Alufluoride said Q2FY27 revenue was 2.4 times Q1FY27 as Visakhapatnam operations returned towards normal.

How was Alufluoride's expansion reflected on the balance sheet?

Alufluoride recorded the completed project in fixed assets by September 2026, when its net block, or net property, plant and equipment (PP&E), reached Rs 92.9 crore from Rs 65.0 crore at March 2026. Capital work-in-progress (CWIP) fell to Rs 1.8 crore from Rs 22.5 crore over the same period, a Rs 20.7 crore reduction that the presentation linked to the capitalised expansion.

Alufluoride's September 2026 balance sheet also showed increased working capital alongside higher activity. Inventories rose Rs 8.1 crore to Rs 29.1 crore and trade receivables rose Rs 8.0 crore to Rs 18.9 crore, while cash and investments increased Rs 17.9 crore to Rs 62.9 crore, borrowings increased Rs 5.8 crore to Rs 34.3 crore and net worth rose Rs 14.9 crore to Rs 140.6 crore.

What did the expansion coincide with in H1FY27 performance?

Alufluoride reported first-half fiscal year 2027, or H1FY27, operating revenue of Rs 90.5 crore, down 8% from Rs 98.6 crore in H1FY26, because the Q1FY27 FSA shortfall reduced activity before the June commissioning and July supply resolution. Despite the lower half-year revenue, earnings before interest, tax, depreciation and amortisation (EBITDA) increased 43% to Rs 31.3 crore and profit after tax rose 62% to Rs 17.9 crore.

The recovery was more visible in Q2FY27, when revenue from operations rose 17% year on year to Rs 63.9 crore from Rs 54.8 crore in Q2FY26. All operating revenue came from Aluminium Fluoride; EBITDA increased 70% to Rs 24.4 crore and profit after tax increased 91% to Rs 15.2 crore, while EBITDA margin before other income rose to 36.1% from 25.4%.

The quarterly comparison shows earnings rising faster than sales as operations normalised. Profit before tax increased 81% to Rs 20.5 crore in Q2FY27 from Rs 11.3 crore a year earlier, compared with a 51% increase to Rs 23.8 crore for H1FY27; Alufluoride also declared an interim dividend of Rs 2.5 per share for H1FY27.

Which costs and inputs will shape Alufluoride's expanded output?

Alufluoride identifies FSA cost and availability as the variable it manages most closely because FSA is the fluorine-containing feedstock used in Aluminium Fluoride production. It has long-term contracts with leading phosphatic fertiliser producers, added a new source in April 2026 and said suppliers had indicated additional quantities as they upgrade fluorine recovery, subject to the company's quality specifications.

Material cost, net of inventory change, fell 13% year on year to Rs 23.3 crore in Q2FY27 as revenue rose 17% to Rs 63.9 crore. Materials were 36.4% of revenue, compared with 48.8% in Q2FY26, aided by alumina hydrate bought ahead and prices agreed in May 2026; Alufluoride said this inventory benefit will taper as stocks are consumed.

Other cost lines increased in Q2FY27. Power and fuel rose 18% to Rs 8.7 crore, employee benefits rose 52% to Rs 3.8 crore, depreciation rose 21% to Rs 2.9 crore and finance costs rose 57% to Rs 1.0 crore; the company linked depreciation and finance costs to the capitalised expansion and noted rising fuel-linked freight for FSA sourced from distant locations.

How concentrated are Alufluoride's sales after the capacity addition?

Alufluoride remains a single-product operating business, with Aluminium Fluoride generating all Rs 63.9 crore of Q2FY27 operating revenue. The company reported that no Indian Accounting Standard 108 segment split applies, while its 4.1-megawatt captive solar units generated no revenue in Q2FY27 or Q2FY26 because they are largely used internally to lower conversion cost.

Customer concentration eased in the annual comparison disclosed by Alufluoride, although it remained material. Its largest customer's share of Aluminium Fluoride revenue declined to 54% in FY26 from 69% in FY25, while the top two customers accounted for 72% and Odisha represented 70% of revenue.

Alufluoride is pursuing qualification of additional buyers and overseas markets through Alufluoride International Pte. Ltd. in Singapore. The presentation also identifies Hindalco, Vedanta and NALCO as qualified customers, while noting that customer qualification is slow to win and slow to lose.

Conclusion

Alufluoride's June 2026 project completion added 6,000 tonnes of annual Aluminium Fluoride capacity and brought total capacity to 24,000 tonnes. The balance-sheet change was substantial, with CWIP declining Rs 20.7 crore and net PP&E increasing Rs 27.9 crore by September 2026, while the FSA supply resolution supported a Q2FY27 recovery in revenue and profit.

The next issues to watch are FSA availability and freight cost, particularly for distant supply sources, as well as the tapering benefit from alumina hydrate inventory. Management's disclosed plans to secure additional FSA quantities as suppliers upgrade fluorine recovery, and to qualify more buyers and overseas markets, will shape how the additional capacity is supplied and sold.