Accumulate Navin Fluorine International; target of Rs 3621: Prabhudas Lilladher

About this update from Navin Fluorine International Limited

Prabhudas Lilladher's research report on Navin Fluorine InternationalNavin Fluorine International (NFIL) reported a revenue of Rs6bn (-13.6% YoY/ 20% QoQ). The topline was 21% higher than PLe estimates of 4.9bn (Cons est. 5.4bn). The growth was driven by HPP and Specialty Chemicals vertical which saw 18% and 45% growth respectively. The Specialty Chemicals vertical will majorly focus on Agro Chem and has added 3 new molecules in Q4FY24 taking the total product portfolio to 9. The previously struggling HFO plant has stabilized and is anticipated to achieve 1.3x volume growth if operated at the same utilization rate as in Q4FY24. However, CDMO vertical’s performance fell below expectations mainly due to deferral in sales of key molecules, but has the potential to double revenue in FY25. We cut estimates by ~20% in order to take into account disappointment in CDMO and expected weakness in specialties segment, ~80% of which is agrochem.OutlookThe stock is currently trading at 40x FY26E EPS of Rs 86. We value the company at 42x FY26E EPS to arrive at our TP of Rs 3,621 (earlier Rs 3,737). We downgrade the stock to Accumulate on account of the weakness expected.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Navin Fluorine International - 08052024 - prabhu

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