Accumulate Navin Fluorine International Ltd For Target Rs.8,377 by Prabhudas Liladhar Capital Ltd
Capacity expansion to support future growth
Navin Fluorine International Ltd (NFIL) reported its highest-ever quarterly revenue of Rs10.45bn, reflecting robust growth of 44% YoY and 11% QoQ. This strong performance was driven by healthy momentum across all three business segments. The High-Performance Products (HPP) segment recorded a 33% YoY growth, supported by strong demand, higher realizations, and volumes. The company has started getting interest from customers for contractual offtakes in new capacity of R32 equivalent. The Specialty Chemicals segment delivered a 48% YoY increase, with a strong product pipeline and solid order visibility already secured for FY27. The CDMO segment witnessed a strong performance, registering 82% YoY growth with 98% of its revenue export-driven, aided by the ramp uo of commercial supplies from Phase 1 of cGMP4. The management has reiterated its USD100mn CDMO guidance for FY27 and expect sustained growth momentum for this segment. We remain positive on NFIL’s long-term outlook, supported by a strong order pipeline, ongoing capacity expansion, and debottlenecking initiatives that are expected to sustain growth. At present, the stock trades at 35x FY28E EPS. We value the company at 37x FY28E EPS, arriving at a target price of Rs8,377, and maintain our ‘Accumulate’ rating on the stock.
CDMO/Specialty Chemicals up 82%/48% YoY:
Consolidated revenue stood at INR10.5bn (44.1% YoY/ 11.5% QoQ) (PLe: INR8.8bn, Consensus: INR9.5bn), actual topline was 19.4% higher than our estimates, The HPP and Specialty Chemicals segments saw a revenue increase of 33% and 48%, respectively, while the CDMO segment witnessed 82% growth in revenue driven by Increasing demand for existing molecule. Gross profit margin was at 57% (vs 57.6% in Q1FY26 and 58.6% in Q4FY26), contracted by 160bps YoY, driven by higher raw material cost.
EBITDA margin expands by 570bps YoY:
EBITDA stood at INR3.6bn and increased 72.7% YoY/ 11.2% QoQ, (PLe: INR2.6bn, Consensus: INR3bn). EBITDA margin came at 34.2% (vs 28.5% in Q1FY26 and 34.2% in Q4FY26). Reported PAT was at INR2.4bn, increased by 108% YoY and 14.4% QoQ. PAT margins were at 23% vs 16% & 23% in Q1FY26 & Q4FY26 respectively
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