Chemical stock jumps 4% after signing ₹2,362 Cr contract with Japanese customer

Synopsis: TANFAC Industries Ltd shares jump 4% upon signing a seven-year contract with a Japanese customer to supply 7,500 MT of fluorinated chemicals annually from January 2027 for around ~ ₹2,362 crore.

The shares of the Small-Cap company specialising in the manufacture of hydrofluoric acid and a wide range of organic and inorganic fluorine-based derivatives and specialty chemicals, are in focus upon securing a supply agreement with a Japanese entity.

With a market capitalization of Rs. 4,528.65 Crores on Monday, the shares of TANFAC Industries Ltd rose upto 4 percent, reaching a high of Rs. 4577.85 compared to its previous close of Rs. 4401.65. As of December 2025, Ashish Kacholia holds a 1.65 percent stake in the company.

What Happened

TANFAC Industries Ltd, engaged in the manufacture of hydrofluoric acid and a wide range of organic and inorganic fluorine-based derivatives and specialty chemicals, has signed a seven-year contract with a Japanese customer to supply 7,500 MT of fluorinated chemicals each year, starting from January 1, 2027. 

The deal is worth around Rs. 337.5 crore annually, totaling approximately Rs. 2,362.5 crore over the contract period, excluding GST. This contract strengthens the Company’s domestic and export portfolio, enhances earnings predictability, and reinforces its position as a reliable supplier in the global fluorinated chemicals market.

Commenting on the proposed project, Mr Afzal Malkani, Managing Director, said: “This contract represents a significant step in deepening our engagement with global customers and reflects the confidence placed in our manufacturing capabilities and quality standards. 

The long-term structure of the agreement provides revenue stability, representing 37.5% of the recently announced fluorinated chemical plant capacity and aligns with our strategy of expanding a value-added downstream fluorinated chemicals portfolio and building durable relationships with global customers.”

Additionally, the company has recently approved a proposal for a stock split in a 1:2 ratio, such that 1 equity share having a face value of Rs. 10 each to be subdivided into 2 equity shares having a face value of Rs. 5 each, subject to shareholder and regulatory approvals and the record date for the split will be announced after receiving the necessary approvals.

Financials& Others

The company’s revenue rose by 51 percent from Rs. 112 crore in September 2024 to Rs. 169 crore in September 2025. Meanwhile, the Net profit declined from  Rs. 19 crore to  Rs. 17 crore during the same period.

The company demonstrates strong financial performance with a return on capital employed (ROCE) of 41.8 percent and a return on equity (ROE) of 32 percent, reflecting its efficient use of capital to generate profits. Its low debt-to-equity ratio of 0.09 indicates a conservative capital structure, suggesting minimal reliance on debt and strong financial stability.

Over the past five years, the company has achieved an impressive profit growth CAGR of 38.6 percent, underpinned by a consistent track record of profitability. With a three-year average ROE of 30.1 percent, it shows sustained ability to deliver value to shareholders, highlighting both operational efficiency and robust business fundamentals.

Tanfac Industries Limited is one of the leading entities in the Indian chemical sector, functioning as a joint venture between Anupam Rasayan India Limited and the Tamil Nadu Industrial Development Corporation (TIDCO). It is one of the foremost producers of hydrofluoric acid and its derivatives, including aluminium fluoride and a range of specialty chemicals.

The company maintains a comprehensive product portfolio, which includes anhydrous hydrofluoric acid, sulphuric acid, oleum, potassium fluoride, potassium bifluoride, boron trifluoride complexes and calcium sulphate, among others.

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