Accumulate Navin Fluorine International; target of Rs 4895: Deven Choksey

Deven Choksey's research report on Navin Fluorine International

Navin Fluorine Q4FY25 earnings came in line with our estimates despite revenue falling short of our projections. Revenue came in at INR 7,009 Mn., up 16.4% YoY (+15.6% QoQ), driven by robust CDMO and HPP segment growth, falling short of our estimates by 16.8%. EBITDA stood at INR 1,787 Mn., up 62.4% YoY (+21.3% QoQ), above our estimates by 6.3%, driven by higher gross margins. EBITDA margin stood at 25.5%, up 721bps YoY (-120bps QoQ). PAT stood at INR 950 Mn., up 34.9% YoY (+13.6% QoQ), was in-line with our estimates. PAT margin stood at 13.5% (+186bps YoY/ - 24bps QoQ), led by better operating performance. We have revised our FY26E/FY27E EPS by +2.7%/+5.4%, as we bake in sustained improvement in EBITDA margins. We believe the outlook is aided by the upcoming commercialization of new capacities, including the Buss Chem AG and Chemours partnerships, expected to be operational by Q2FY26E and Q1FY27E, respectively. The company is poised to benefit from CDMO capacity expansion, with the new facility slated for commissioning by Q3FY26E.

Outlook

We value Navin Fluorine at 42.0x FY27E EPS, implying a target price of INR 4,895. We reiterate and maintain our “ACCUMULATE” rating on the stock.

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