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Scaling up new horizons

We believe Navin Fluorine is on an aggressive growth path with major growth drivers across all segments. It is set to see strong growth in the CDMO segment driven by multiple pharma intermediate supply agreements for EU and US pharma majors, enabled by its strong R&D capabilities. In the ref gas business, it is likely to benefit from tailwinds in the global HFC-32 market, leading to a healthy market opportunity. Besides that, Navin’s recent agreement with Chemours for data centre cooling liquids and upcoming high-purity AHF grades provide entry into crucial emerging segments. Also, the company is likely to see robust sales contribution from intermediates supplied to Corteva from FY26. This is likely to result in 25%/29%/36% sales/EBITDA/EPS CAGR over FY25-28E. We resume our coverage with an unchanged BUY rating and a Sep’26 TP of INR 6,050/share (based on 45x Sep’27E EPS) as we remain constructive on the company’s growth prospects. Navin Fluorine is our top pick in our coverage universe.

* HFC-32 sales could benefit from global tailwinds: Global HFC-32 demand is likely to largely absorb incremental supply coming from Indian manufacturers, keeping the risk of oversupply minimal and market opportunity intact for Navin. As a result, Navin’s current and upcoming HFC-32 capacities, with increasing utilisation, are likely to drive HFC-32 sales from a likely ~1.9bn in FY25 to ~INR 8.8bn in FY28E. Hence, incremental growth in the HPP segment could be led primarily by HFC-32, with some incremental contribution from AHF merchant sales and high purity grades, offsetting the decline in HCFC-22 sales in line with the Kigali Amendment. We expect HPP segment sales to rise from ~INR 12.1bn in FY25 to ~INR 18.6bn in FY28 at a healthy 16% CAGR over FY25-28E.

* Multiple agreements to enable CDMO sales to register strong growth over next 4-5 years: Multiple CDMO intermediates supply contracts with leading global pharma majors, including prostate cancer drug Nubeqa, along with drugs for respiratory, cardiovascular anticoagulant (for thrombotic diseases) therapies, are set to drive robust growth in the CDMO segment. Nubeqa, which achieved blockbuster status in Sep’24, is likely see expanded usage in the US and Europe with additional treatment options. Drug for the anticoagulant therapy targets an addressable market of ~17mn patients. These multiple agreements, combined with Navin’s strong R&D capabilities, are likely to drive significant growth in CDMO segment from ~INR 3.4bn in FY25 to ~INR 10.1bn by FY28, at a robust ~43% CAGR.

* Spec chem on robust ramp-up mode; recommend BUY: We expect spec chem segment sales to increase from ~INR 8bn in FY25 to ~INR 17.2bn in FY28, at a robust CAGR of ~29%, on account of robust sales contribution from the Corteva contract, OpteonTM 2P50 volume from FY27E and modest growth in the base spec chem business. Overall, we expect Navin to deliver a ~25%/29%/36% sales/EBITDA/EPS CAGR over FY25-28E. Moreover, there remains a strong visibility even beyond FY28E, especially from HPP and CDMO segments. We resume coverage with an unchanged BUY rating and a Sep'26 TP of INR 6,050/share (based on 45x Sep’27E EPS).

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