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Strong order visibility going ahead

Quick Pointers:

* Tie up with Buss ChemTech AG for solar & electronic grade HF and partnership with Chemours to foray into high growth advanced materials.

* AHF capex to commission by Q2FY26, while phase 1 capex of cGMP4 to commission by end of Q3FY26

Navin Fluorine International (NFIL) reported its highest-ever quarterly revenue at Rs7bn, marking a growth of 16.4% YoY and 15.6% QoQ. The topline exceeded our estimate of Rs6bn by 13%, primarily driven by exceptional performance in the CDMO segment, which recorded a robust 115% YoY growth on the back of a strong order book. CDMO orders for CY25 are already secured, and the management has reiterated its revenue guidance of USD100mn from this segment by FY27. The HPP segment posted a 10% YoY increase, supported by higher volumes and improved realizations. The recent expansion of R-32 capacity by 5,000mtpa was commercialized in March’25 and is already operating at optimal utilization levels. Additionally, the ongoing capex for AHF is on track for commissioning by Q2FY26. The Specialty Chemicals segment remained flat YoY, with both the Dahej and Surat facilities running at optimal capacity. Management has indicated strong order visibility for FY26, with two new molecules scheduled to begin commercial supplies in Q1FY26. We believe long-term fundamentals of the company are intact. The strong order pipeline, expanding capacity, and improving realizations are expected to be key growth drivers going forward. The stock is currently trading at 45x FY27E EPS of Rs101. We value the company at 51x FY27 EPS to arrive at TP of Rs5,161. We maintain ‘Accumulate’ on the stock.

* HPP/CDMO see 10%/115% YoY revenue growth: Consolidated revenue stood at Rs7bn (16.4% YoY/15.6% QoQ), (PLe: Rs6.23bn, Consensus: Rs6.7bn). FY25 revenue for the company improved by 13.8% to Rs23.5bn. Gross profit margin was 54.2% (vs 50% in Q4FY24 and 56.6% in Q3FY25). Absolute Gross profit was Rs3.8bn, increased QoQ by 10.7% and YoY by 26.2%. HPP and CDMO segment saw a revenue increase of 10% and 115% respectively, while specialty chemicals segment witnessed 1% growth in revenue.

* EBITDAM improves 420bps YoY: EBITDA stood at Rs1.8bn (62.4% YoY/ 21.3% QoQ), (PLe: Rs1.5bn, Consensus: Rs1.7bn) and EBITDA margin came at 25.5% (vs 18.3% in Q4FY24 and 24.3% in Q3FY25). PAT increased to Rs950mn (35% YoY/ 14% QoQ), while margin came at 14% (vs 12% in Q4FY24 and 14% in Q3FY25).

* Concall takeaways: (1) Agreement with Chemours to manufacture Opteon; current market size of USD0.5bn, likely to rise to USD3bn by 2035. (2) Tied up with Buss Chemtech for solar/electronic grade AHF with much higher realization. (3) R32 capacity running at optimal utilization; demand increasing across geographies; asset turnover 2x. (4) Expect EBITDAM at ~25% going forward on consolidated basis. (5) HPP vertical is insulated from tariff. (6) Agro chemical asset turnover 1.4x. (7) Fluorospecialty to have utilization of 50-55% in FY26. (8) Robust order outlook in CDMO; to achieve earlier guidance of USD100mn rev in 2yrs- 1/3rd Fermion, 1/3rd new contracts, rest base business, asset turnover to be 2x. (9) Balance sheet permits Rs5-6bn annual capex.

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