Accumulate Navin Fluorine International Ltd for the Target Rs 9,554 by Prabhudas Liladhar Ltd
Strong order visibility supports sustained growth outlook
Navin Fluorine International Ltd (NFIL) reported a strong performance in Q2FY27, with consolidated revenue growing 57% YoY and 14% QoQ to INR11.9bn, driven by healthy momentum across all three business segments. The HPP segment growth was supported by higher volumes and improved realizations, aided by strong HFC pricing, increased HF volumes and growth in the HFO business. The company extended its existing HFO supply contract with Honeywell (Solstice Advanced Materials) by four years until Dec’32, which provides additional revenue potential of USD180mn. The Specialty Chemicals segment also continued to witness strong growth, this segment has order visibility for H2FY27 and beyond, with MPP debottlenecking commissioned during the quarter. The CDMO segment sustained its sequential growth momentum, supported by higher offtake from existing molecules and new qualification campaigns, with the USD100mn FY27 revenue target well within reach. Phase 2 of cGMP4 is progressing as planned and is expected to be operational by Q4FY27. We remain positive on NFIL’s long-term outlook, supported by strong order visibility, a healthy product pipeline and ongoing capacity expansion. The stock trades at 33x FY29E EPS. We value the company at 38x Sep’28E EPS, arriving at a target price of INR9,554, and maintain our ‘Accumulate’ rating.
CDMO/Specialty Chemicals up 78%/58% YoY:
Consolidated revenue stood at INR11.9bn (57% YoY/ 14% QoQ) (PLe: INR10.4bn, Consensus: INR10.7bn), actual topline was 14% higher than our estimates. H1FY27 revenue grew by 51%, The HPP and Specialty Chemicals segments saw a revenue increase of 50% and 58%, respectively, while the CDMO segment witnessed 78% YoY growth in revenue driven by Increasing demand for existing molecule. Gross profit margin was 56.9% (vs 58.7% in Q2FY26 and 57% in Q1FY27), contracted by 180bps YoY and 10bps QoQ.
EBITDA increased by 66% YoY:
EBITDA stood at INR4.1bn, increased 65.5% YoY/ 14.1% QoQ, (PLe: INR3.5bn, Consensus: INR3.5bn). EBITDA margin came at 34.2% (vs 32.5% in Q2FY26 and 34.2% in Q1FY27). H1FY27 EBITDA increased by 69% to INR7.6bn. Reported PAT was at INR2,692mn, increased by 82% YoY and 11% sequentially. PAT margins were at 23% vs 20% & 23% in Q2FY26 & Q1FY27 respectively.
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SEBI Registration number is INH000000933
