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Strong execution

The stock price of Navin Fluorine International (NFIL IN) was up 11 % in the past three months and outperformed the Nifty Mid -cap (up 1%), on positive sentiment s over India -UK FTA and India -US trade deal s. A s highlighted in our Chemicals sector report (‘ Stabilization sans recovery globally ’ dated 29 January 202 6), NFIL’s markets bucked the declining trend globally. NFIL delivered a strong Q3FY26, with consolidated revenue rising to 47% YoY and +18% QoQ, supported by growth across its three verticals. EBITDA increased 109% YoY with margin expanding further to 34.5%, reflecting richer mix, higher utilization , and operating leverage. During 9MFY26, the company reported revenue growth of 44% YoY and sustained EBITDA margin of ~32%, indicating a n earnings step -up rather than a one -off quarter. NFIL is the most aligned to the current cycle, with exposu re to hydrofluoroolefins (HFO) refrigerants, high -purity electronics materials (BF ?), Contract Development and Manufacturing Organization (CDMO) and specialty agrochem icals . These segments offer superior earnings visibility, led by regulato ry support glob ally. Based on 9MFY26 earning s trend and management commentary, we increase our EPS by 12% for FY26E , 10% for FY27E & 10% for FY 28E and raise TP to INR 7,958. We reiterate our Buy rating .

Adj PAT grows 140% YoY, led by revenue growth: Q3 adjusted PAT was at INR 2.0bn, higher than our estimates of INR 1. 5bn. PAT growth was led by revenue growth across segments : 35% in high performance products (HPP) , 60% in specialty chemica ls, and 61% in the CDMO.Strong outlook for CDMO: Supplies started from newly validated cGMP4 facility, supporting strong visibility into CY26 and beyond. Management emphasized a more balanced portfolio across early - and late -stage molecules, alongside engagement with EU innovators .

Robust growth in HPP from volume and realization: The r efrigerants pricing environment remains construc tive, supported by the global transition toward low -GWP gases. N FIL has commissioned 40,000tpa anhydrous hydrofluoric acid (AHF ) plant, strengthening backward integration and enabling deeper downstream projects over time. Incremental 15,000tpa R32 capacity with INR 2.4bn capex, has been targeted for commissioning in Q3FY27, with peak revenue potential of INR 6-8bn.

Specialty chemicals sees the sharpest acceleration: The planned mult i-purpose plant (MPP) debottlenecking at Dahej (INR 750mn capex; peak revenue potential INR 1.4 – 1.6bn) on track for Q3FY27, supported by confirmed CY26 orders from a global innovator. Specialty chemicals continues to strengthen N FIL ’s transition toward innovation -led fluorinated intermediates.

Reiterate Buy with a higher TP of INR 7,958: Based on 9MFY26 earning s trend and management commentary, we increase our EPS by 12% for FY26E , 10% for FY 27E & 10% for FY 28E and raise our TP to INR 7,958 from INR 7,317. We reiterate Buy. We value NFIL on a DCF method , assuming 5.0% (unchanged) terminal growth and an 11.8% (unchanged) cost of capital, with a 41% (from 38%) EBITDA CAGR during FY25 -28E.

Strong outlook for CDMO: Supplies started from newly validated cGMP4 facility, supporting strong visibility into CY26 and beyond. Management emphasized a more balanced portfolio across early - and late -stage molecules, alongside engagement with EU innovators

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