Emkay Global Financial is bullish on Navin Fluorine International has recommended buy rating on the stock with a target price of Rs 1925 in its research report dated July 30, 2020.
Emkay Global Financial's report on Navin Fluorine International
NFIL’s consolidated sales came in below estimates (down 14.6% yoy). Despite growth in export markets (up 15% yoy) arising from Specialty Chemicals and CRAMS (up 56%/36% yoy), a steep decline in the domestic market limited overall growth. EBITDA slipped 12% yoy, but margins remained stable as gross margin expanded 550bps yoy on better revenue mix. However, further margin improvement was arrested by elevated employee costs on gross block expansion (cGMP – 3 plant). Management is confident of a strong performance in CRAMS and Specialty Chemicals segments on the back of the solid order book in both segments. NFIL is evaluating scope for capex in Specialty Chemicals and is likely to announce one in a few months.
We remain upbeat on the stock, considering a strong long-term outlook in the Specialty Chemicals segment, CRAMS improvement and a large order win. We maintain Buy and OW in our EAP, with a revised TP of Rs1925 (28x Sept’22E EPS).
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