Emkay Global Financial is bullish on Navin Fluorine International has recommended buy rating on the stock with a target price of Rs 1850 in its research report dated June 18, 2020.
Emkay Global Financial's report on Navin Fluorine International
NFIL's standalone sales were above our estimates (+8.5% yoy). Growth in overseas markets boosted the performance of Specialty Chemicals (51.5% yoy) and CRAMS (26% yoy), whereas R-gas and inorganic fluoride were impacted by the lockdown in March. EBITDA grew 28.7% yoy, with margin expansion of 398bps yoy, due to lower raw material costs and improved product mix (higher contribution from Specialty Chemicals and CRAMS). Gross margins expanded 430bps yoy. Management is confident of strong performance from CRAMS and Specialty Chemicals segments on the back of strong order books in both the segments. They are evaluating scope for capex in Specialty Chemicals and likely to announce in Q1FY21.
We remain upbeat on the stock on the back of strong long-term outlook in the Speciality Chemicals segment, CRAMS improvement and a large order win. We maintain our Buy rating on the stock, with revised TP of Rs1850 (29x June'22E EPS) and OW in our EAP.
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