Navin Fluorine International Ltd. share price target

We recommend a BUY on the stock with a target price of Rs 4,300/share, implying an upside of 10% from the CMP

Strong recovery in Q3; healthy growth to sustain in FY26.

Navin Fluorine International Ltd. (NFIL) Q2FY25 earnings exceeded projections while revenue missed our estimates.
Revenue increased to INR 5,186 Mn by 9.9% YoY (-1.0% QoQ), missing our estimates by 4.4%.

We upgrade the stock to HOLD from SELL rating as we roll over the estimates to FY27 which factors in the expected growth from ongoing expansion initiatives.

Navin Fluorine International (NFIL)’s EBITDA/ PAT in 2QFY25 came in at 6%/12%
higher than our estimates due to the strong YoY performance in HPP and CDMO
segments.

We visited Navin Fluorine’s plant based in Dewas, Madhya Pradesh which caters to its CDMO business vertical. The company manufacture pharma intermediates for commercialized (50-60%) and last-stage molecules.

Navin Fluorine International Ltd. (NFIL) Q1FY25 numbers missed our estimates across the board. Revenue increased to INR 5,237 Mn, up 6.6% YoY but fell by 13.0% QoQ, driven by growth in HPP vertical partial offset by weaker performance in CDMO and specialty chemicals division.

We downgrade to SELL from HOLD rating on the stock to factor in the near-term headwinds and recent surge in stock price.

NFIL’s Q1 revenue was up 14% YoY at Rs5.2bn (-13% QoQ), owing to volume recovery in the HFO plant (YoY) and higher volumes/pricing-in the ref gas business.

Navin Fluorine International Ltd. (NFL) reported strong numbers which beat our estimates across the board.
Revenue increased by 20.4% QoQ to INR 6,020 Mn and beat our estimates. The stronger-than-expected revenue growth reflected strong utilization at the Surat plant and the addition of new molecules, while lower export realizations impacted top-line growth.

NFIL’s Q4 revenue was down 14% YoY at Rs6bn (+20% QoQ) owing to i) lower
volumes in the HFO plant (YoY) and pricing pressure in the ref gas business; ii)
deferral of sales for key molecules in the CDMO business to FY25 (vs. H2FY24).

Navin Fluorine’s (NFIL) EBITDA/PAT grew 13%/42% YoY in 4QFY24, higher than
our estimates. The beat was driven by a strong performance in the Specialty
Chemicals business, which was well supported by growth in the HPP segment.
Gross margin was 50%, while EBITDA margin dipped 10.7pp YoY to 18.3%.

We maintain our hold rating on the stock to factor in the difficult macros and continued uncertainty across the leadership position.

We recommend a BUY on the stock for a target price of Rs 3,430/share, implying an upside of 11% from CMP.

In Q3FY24, Navin Fluorine reported a revenue of INR 5,018 Mn, reflecting an 11.0% YoY decline and a 6.4% QoQ increase. Within the business segments, Specialty Chemicals recorded revenues of INR 1,770 Mn (-4.5% YoY), HPP reached INR 2,510 Mn (-0.6% YoY), and CDMO reported revenues of INR 730 Mn (-41.5% YoY).