Shares of chemical players SRF Ltd and Navin Fluorine International surged as much as 14% on Thursday after a report from brokerage firm Equirus Capital highlighted a sharp rise in global refrigerant gas prices.The rally follows warnings from a leading U.S. distributor with significant quotas, which cited severe supply constraints for key refrigerant gases, R32 and R125. These constraints are creating challenges for the Heating, Ventilation, and Air Conditioning (HVAC) industry, which depends heavily on these gases for its operations.SRF Ltd shares jumped as much as 13.8% on Thursday to Rs 2674.9 on the BSE, while shares of Navin Fluorine International rallied as much as 13.9% to reach Rs 3974.15 on the BSE.Analysts at Equirus noted that the supply dynamics of refrigerant gases have tightened globally, pushing prices higher and offering substantial financial benefits for producers like SRF and Navin Fluorine.SRF is well-positioned to capitalize on the rising prices, with an annual production capacity of 29,000 to 30,000 tons of R32 and approximately 7,000 tons of R125. Equirus estimated that for every $1/kg increase in the realization of R32, SRF’s EBITDA could increase by Rs 260 crore. Similarly, a $1/kg rise in R125 prices could contribute an additional Rs 60 crore to the company’s EBITDA.Navin Fluorine, which currently produces about 4,500 tons of R32 annually, is also set to benefit from the market shift. The company plans to double its R32 capacity to 9,000 tons by February 2025. According to Equirus, starting February 2025, every $1/kg increase in R32 prices could boost Navin Fluorine’s EBITDA by Rs 77 crore.The price surge highlights the growing demand-supply imbalance in the refrigerant gas segment, which is critical to the HVAC sector. With their established production capacities and expansion plans, SRF and Navin Fluorine are expected to remain key beneficiaries of this trend.Also read | Bharti Airtel dividend may quadruple in 3 years: HSBC(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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