Tanfac Industries has secured a major breakthrough in its international business operations by signing a comprehensive long-term supply agreement with a Japanese customer for fluorinated chemicals. This strategic deal represents a significant milestone for the chemical manufacturer, providing substantial revenue visibility and strengthening its global market position.

Contract Details and Financial Impact

The seven-year supply agreement encompasses substantial financial commitments and operational requirements that will shape the company's future growth trajectory.

The agreement provides long-term revenue visibility backed by agreed-upon volumes and represents 37.50% of the recently announced fluorinated chemical plant capacity. This deal significantly strengthens the company's domestic and export portfolio while improving earnings predictability and solidifying its position as a dependable supplier in the global fluorinated chemicals market.

Management Perspective

Mr. Afzal Malkani, Managing Director, emphasized the strategic importance of this contract: "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 and aligns with our strategy of expanding a value-added downstream fluorinated chemicals portfolio and building durable relationships with global customers."

Corporate Actions and Expansion Plans

The contract announcement coincides with significant corporate developments approved during the Board Meeting on January 9, 2026.

Stock Split Approval

The Board of Directors considered and approved the subdivision of equity shares, subject to shareholder and statutory regulatory approval.

The proposed stock split aims to increase liquidity of equity shares and attract small investors by making the company's equity shares more affordable for investment.

Manufacturing Facility Expansion

The board approved construction of a new downstream fluorinated chemicals manufacturing facility at the existing Cuddalore manufacturing location.

Company Background

Tanfac Industries Limited operates as a joint sector company with Anupam Rasayan India Limited and Tamil Nadu Industrial Development Corporation as promoters. The company commenced commercial manufacturing in March 1985 and operates manufacturing facilities in SIPCOT Industrial Estate in Cuddalore, specializing in hydrofluoric acid and its derivatives. The company maintains accreditation under ISO 9001, ISO 14001, and OHSAS 18001 standards, adhering to globally recognized safety measures.

TANFAC Industries Ltd shares gained 4% following the announcement of a major seven-year supply contract with a Japanese customer. The specialty chemicals manufacturer secured a deal worth approximately ₹2,362.50 crores to supply fluorinated chemicals, strengthening its position in the global market.

Contract Details and Market Impact

The company's shares reached a high of ₹4,577.85 compared to the previous close of ₹4,401.65, reflecting investor confidence in the new contract. With a market capitalization of ₹4,528.65 crores as of the trading session, TANFAC Industries demonstrated strong market response to the strategic announcement.

The agreement involves supplying 7,500 MT of fluorinated chemicals annually starting from January 1, 2027. The contract value excludes GST and represents a significant portion of the company's recently announced fluorinated chemical plant capacity.

Management Commentary and Strategic Impact

Mr. Afzal Malkani, Managing Director, emphasized the contract's strategic importance, stating it represents a significant step in deepening engagement with global customers. The long-term structure provides revenue stability and aligns with the company's strategy of expanding its value-added downstream fluorinated chemicals portfolio while building durable relationships with global customers.

The contract enhances earnings predictability and reinforces TANFAC's position as a reliable supplier in the global fluorinated chemicals market, strengthening both domestic and export portfolios.

Corporate Actions

The company has approved a stock split proposal in a 1:2 ratio, subject to shareholder and regulatory approvals. Under this proposal, each equity share with a face value of ₹10.00 will be subdivided into two equity shares with a face value of ₹5.00 each. The record date for the split will be announced after receiving necessary approvals.

Financial Performance Analysis

TANFAC Industries demonstrated mixed financial results in recent periods, with significant revenue growth offset by a slight decline in profitability.

The company maintains strong financial fundamentals with a return on capital employed (ROCE) of 41.80% and return on equity (ROE) of 32.00%. The low debt-to-equity ratio of 0.09 indicates conservative capital structure and minimal reliance on debt financing.

Company Profile and Market Position

TANFAC Industries Limited operates as a joint venture between Anupam Rasayan India Limited and Tamil Nadu Industrial Development Corporation (TIDCO). The company stands as one of the leading entities in the Indian chemical sector and among the foremost producers of hydrofluoric acid and its derivatives.

The comprehensive product portfolio includes:

• Anhydrous hydrofluoric acid
• Aluminium fluoride
• Sulphuric acid and oleum
• Potassium fluoride and potassium bifluoride
• Boron trifluoride complexes
• Calcium sulphate
• Various specialty chemicals

The company has achieved impressive profit growth CAGR of 38.60% over the past five years, with a three-year average ROE of 30.10%, demonstrating sustained operational efficiency and robust business fundamentals.