Accumulate Navin Fluorine International; target of Rs 3769: KR Choksey

KR Choksey recommended accumulate rating on Navin Fluorine International with a target price of Rs 3769 in its research report dated October 25, 2024.

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October 25, 2024 / 13:55 IST

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KR Choksey's research report on Navin Fluorine International

Navin Fluorine International Ltd. (NFIL) Q2FY25 earnings exceeded projections while revenue missed our estimates. Revenue increased to INR 5,186 Mn by 9.9% YoY (-1.0% QoQ), missing our estimates by 4.4%. EBITDA stood at INR 1,074 Mn, up 9.2% YoY (+7.0% QoQ), missing our expectations by 3.5%. EBITDA margin came in at 20.7%, down 14bps YoY (+154bps QoQ). The QoQ improvement in margin was attributable to improved gross margin by (+80bps) and a reduction in other expenses (+64bps). PAT came in at INR 588 Mn, down 2.9% YoY (+14.9% QoQ) and exceeded our expectations. PAT margin stood at 11.3% down 150bps YoY (+157bps QoQ). We project FY26E EPS of INR 89.7 and assign a P/E multiple of 42.0x, reflecting our confidence in the company’s ability to enhance margins, capitalize on increased capacity, and robust sales from the HPP segment.

Outlook

Additionally, stable Hydrofluoroolefins (HFO) operations, maximized capacity utilization, and improved productivity further support our outlook Accordingly, we arrive at a TP of INR 3,769 and retain our “ACCUMULATE” rating on the shares of NFIL.

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