Navin Fluorine International Ltd. share price target

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

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%.

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).

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

Recommendation With a 3.7% upside from the CMP, we revise our rating on the stock from BUY to HOLD to factor in the difficult macros and continued uncertainty across the leadership position.

With an 11% upside from the CMP, we maintain our BUY rating on the stock.

Navin Fluorine International (NFIL)’s Q2FY24 net profit rose 4.8% YoY to INR 606mn, despite commissioning of multiple projects, this was significantly below expectation. Margins were hurt by plant related issues, some delays in dispatches and general weakness in chemicals.

Navin Fluorine International’s (NFIL) Q1FY24 net profit dipped 17.5% YoY to INR 615mn despite revenue growth of 24% YoY and lower depreciation charges of INR 150mn. Honeywell supply plant had two months of lost sales due to shutdown and volatility in demand forecast; one molecule for agrochemicals had nil sales due to destocking.

Company Outlook & Guidance: We maintain a positive outlook on the stock (Unchanged from the earlier stance).The company has indicated strong execution and its ability to attract business in CDMO vertical outside core chemistries.

Shutdown of the HFO facility affects growth in the HPP segment

Recommendation With a 10% upside from the CMP, we maintain our BUY rating on the stock.