Navin Fluorine International Ltd. share price target

We maintain Buy with a target price of Rs 915. Navin Fluorine International Ltd (NFIL) reported sales growth of 10.8% YoY to Rs 2.41bn. EBITDA and PAT declined by 4.7% and 20.0% YoY to Rs 503mn and Rs 343mn respectively. Growth in CRAMS (ex- Dahej) has staggered (grew 4.1% YoY to Rs 510). 1HFY19 revenues from CRAMS are at Rs 860mn (down 13.1% YoY). CRAMS is a lumpy business and the management expects recovery in the ensuing quarters.

We are valuing NFIL at 22x FY20E EPS of Rs 40.4 and resume coverage with a TP of Rs 890. Navin Fluorine International Ltds (NFIL IN) four decade long experience in handling niche Fluorine chemistry, strategic tie ups with significant entities (viz Honeywell PLC and Piramal Enterprises), prudent allocation of carbon emission reduction credits (earned ~ Rs 4.0 bn from FY11-FY13 to invest in Specialty Chemicals and CRAMS) and faster than expected growth in CRAMS business (expected to grow at a CAGR of 65.8% from FY15-20E) are a testament to NFILs journey of being the strongest player in Fluorine chemistry.

Stellar Performance: NFIL has posted strong performance of revenue growth of 36.5% YoY to Rs. 2381 Mn in Q1FY18 as compared to Rs. 1745 Mn in Q1FY17. The topline growth was mainly driven by the splendid performance from CRAMS and refrigeration gases segments during the same period. EBITDA for the quarter came at Rs. 594 Mn up from Rs. 403 Mn over the same period of last year, marking YoY growth of 47.4%.

Decent performance under tough business environment- outlook positive: The company has recorded consolidated revenue of Rs. 7477 Mn in FY17 as against of Rs. 6797 Mn of FY16 thereby marking 10.0% growth YoY basis. The sales rose on account of robust performance of CRAMs and inorganic fluoride business.

Navin Fluorines (NFIL) 4QFY17 revenues came in at Rs 2.0bn ( 6% YoY), led by growth in the inorganic segment. Higher volumes led to an EBITDA margin of 19.5% ( 55bps YoY). EBITDA was Rs 390mn ( 9%) and APAT Rs 294mn (-7% YoY, higher tax rate).

Navin Fluorine (NFIL), part of the Arvind Mafatlal group, is a leader in fluorine based chemicals in India. It operates mainly in four segments i.e. Refrigerant, Organic Fluoride, Specialty Chemicals and CRAMs. While Refrigerant segment will continue to generate strong cash flows, the incremental focus of the company is the high margin an..

In-line Performance, Outlook Remains Positive: Revenue for Q3FY17 is at Rs. 1535 Mn as against Rs. 1447 Mn in Q3FY16,marked 6.1% growth YoY basis. During the quarter, revenue surged due to strong performance of Inorganic fluorides and CRAM business unit which have grown by22.8% & 26.8% YoY, respectively. EBITDA stood at Rs. 301 Mn with the growth at 33.5% YoY and the margins stood at 19.6% gaining 402 bps YoY mainly due to better product mix which led to increase in volume during aforesaid period. PAT came at Rs. 206 Mn in Q3FY17 compared to Rs. 136 Mn in Q3FY16 registering the growth of 51.5% YoY.

Navin Fluorine (NFIL) 3QFY17 revenues were at Rs 1.5bn ( 6% YoY) led by improvement in CRAMS and inorganic segments. A better product mix and higher volumes led to an EBITDA margin of 19.7% ( 247bps YoY). EBITDA was Rs 304mn ( 32%) and APAT Rs 206mn ( 54% YoY).

Navin Fluorine International Ltd (NFIL) is one of the largest and the most respected Indian manufacturers of speciality fluorochemicals. It belongs to the Arvind Mafatlal Group one of India's oldest industrial houses. Established in 1967, NFIL operates one of the largest integrated fluorochemicals complexes in India with manufacturing...

Navin Fluorine (NFIL) continued stellar performance in 2QFY17 led by strong traction in CRAMS. Revenues were at Rs 1.8bn ( 21% YoY), with almost all incremental coming from CRAMS. A better product mix and higher volumes led to an EBITDA margin of 22.3% ( 129bps YoY). EBITDA was Rs 406mn ( 28%) and APAT Rs 281mn ( 21% YoY).