Navin Fluorine gets third "buy" in 3 days, Avendus sets Rs 4,800 target price

Navin Fluorine gets third positive note in three days; Avendus initiates with ‘Buy’

Shares of Navin Fluorine International received their third positive brokerage note in as many days. The latest came from Avendus Spark, which initiated coverage on the chemical company with a “buy” rating and set a target price of Rs 4,800 per share.

So far this year, this chemical stock surged 43 percent, outperforming benchmark Nifty 50's 4 percent rise.

Catch all the market action on our LIVE blog

According to analysts at Avendus Capital, Navin Fluorine’s shift from a capital expenditure-intensive phase to a cash flow-focused, asset-heavy model is beginning to show results. Several key projects have now entered their ramp-up phase, which is driving an improvement in Return on Invested Capital (RoIC).

The firm expects asset turnover to rise from 0.9 times in the financial year 2025 to 1.2 times by financial year 2027. This, in turn, is likely to support a steady increase in RoIC, from 13 percent to 18 percent over the same period.

Navin Fluorine has also established itself as a preferred manufacturing partner for global innovators, the note added.

The company has recently commissioned larger current Good Manufacturing Practice (cGMP) facilities that are capable of handling more mature and late-stage molecules. As a result, the Contract Development and Manufacturing Organization (CDMO) business is expected to become more stable and less prone to earnings volatility going forward.

Earlier this week, Jefferies reiterated its “buy” call on the stock with a target price of Rs 5,280. The brokerage noted that Navin Fluorine is well placed to monetise its Rs 2,000 crore capital expenditure, undertaken over the past three years, by signing long-term contracts.

Morgan Stanley also recently upgraded the stock to “equalweight” from its previous “underweight” rating. The upgrade was driven by Navin Fluorine’s broader exposure in both contract manufacturing and the advanced materials segment.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.