Motilal Oswal's research report on Navin Fluorine International
Navin Fluorine (NFIL) reported 44%/56% lower-than-estimated EBITDA/PAT due to subdued performances in the HPP/CDMO businesses. Gross margin stood at 58.7%, while EBITDA margin dipped 570bp QoQ to 23.3%. The company expects margin to rebound in the coming quarters with higher utilization at its various plants. High Performance Products (HPP) business (down 42% QoQ) disappointed in 1QFY24 due to multiple shutdowns at the new HFO plant as well as a planned shutdown at the AHF plant. Demand for R22 also remained muted both in the domestic as well as in the international markets. The Specialty Chemicals business jumped 11% QoQ with order book remaining strong. This continues to strengthen the long-term growth visibility of the segment.
Outlook
The stock is trading at 33x FY25E EPS of INR138 and 24x FY25E EV/EBITDA. We value the company at 35x FY25E EPS to arrive at our TP of INR4,815. We maintain our Neutral rating owing to limited upside.
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