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HDFC Securities
Navin Fluorine (Add)
Target: ₹2,410
CMP: ₹2,241.35
We retain our Add rating on Navin Fluorine International with a target price of ₹2,410 on the back of earnings visibility given long-term contracts and tilt in sales mix towards high-margin high-value business. EBITDA/APAT were 45/78 per cent above estimates owing to 27 per cent higher revenue and significantly better EBITDA margin, courtesy better-than-expected contribution from the high-margin Specialty Chemicals and CRAMS business.
Revenue/EBITDA/APAT grew 17/38/57 per cent y-o-y and 50/80/192 per cent q-o-q. Revenue and EBITDA margin grew on the back of strong momentum in high-value business’ performance. EBITDA margin surprised positively at 30.4 per cent, the highest ever reported in the past five years
NFIL sold off its 49 per cent stake in joint venture CCPL to Piramal Pharma for ₹65.10 crore along with ₹7.9 crore towards leasehold rights for GIDC land. NFIL will continue to be the key raw material supplier to CCPL and will have a perpetual license to use CCPL’s technical know-how. GM was down q-o-q due to lower margins in the legacy business.
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