Stock in Action - Navin Fluorine

Navin Fluorine Share Price Movement of Day 

Highlights

1. Navin Fluorine share price has been on upward trend, reflecting positive market sentiment & strong financial performance.

2. ICICI Securities target price for Navin Fluorine International is set at ₹ 4135, indicating potential upside from current market price.

3. Specialty chemicals sector continues to show robust growth, with Navin Fluorine International positioned as key player due to its innovative product offerings.

4. Navin Fluorine financial performance has seen significant improvements, with 19.61% increase in total income for quarter ending March 2024.

5. Nitin G. Kulkarni appointment as Managing Director is expected to drive strategic growth & enhance operational efficiencies at Navin Fluorine International.

6. Promoter & institutional holdings in Navin Fluorine International remain strong, with promoters holding 28.81% & FIIs owning 15.57% as of March 2024.

7. Long-term contracts in chemicals are crucial for Navin Fluorine International, contributing to consistent revenue streams & business stability.

8. Growth drivers in chemicals industry include increasing demand for specialty chemicals, which is expected to benefit companies like Navin Fluorine International.

9. Market cap of Navin Fluorine stands at ₹ 16,741.43 crore, reflecting company’s substantial presence in chemicals sector.

10. Investment opportunity in Navin Fluorine is promising, given company’s strategic initiatives & positive outlook for specialty chemicals market.

Why Navin Fluorine International Share is Buzzing? 

Navin Fluorine International's shares are buzzing due to ICICI Securities' buy call with target price of ₹ 4135, significantly above current price of ₹ 3597.25. appointment of Nitin G. Kulkarni as MD also fueled 4% intraday gain. Despite challenging FY24 with 49% drop in net profit, company anticipates robust growth driven by Specialty Chemicals & Navin Molecular businesses. positive technical outlook & recent corrections further attract investor interest.

Should I Buy Navin Fluorine International? & Why?

Navin Fluorine International Ltd., mid-cap company in chemicals sector, has market cap of ₹ 17,844.94 crore. Its key products include chemicals, services, scrap, & export incentives.

Navin Fluorine Financial Performance

For Q4 FY24, company reported:

-  Consolidated Total Income: ₹614.47 crore (up 19.61% QoQ, down 12.36% YoY)
-  Net Profit: ₹70.38 crore
-  EBITDA Margin: 18.3%
-  Gross Margin: 50%
 

Growth Drivers

1. Specialty Chemicals: Strong revenue growth of 26% YoY due to higher utilization & new molecule additions.

2. Long-term Contracts: Stable revenue from take-or-pay contracts.

3. Future Projects:
   - Specialty Chemicals Capex: ₹450m expected annual revenue from FY25.
   - Fermion Contract: USD 40m over three years starting CY24.
   - Additional R32 capacity by Feb’25.

Promoter & Institutional Holdings (as of 31-Mar-2024)

- Promoters: 28.81%

- FIIs: 15.57%

- DIIs: 17.24%

Management Changes

- Nitin G. Kulkarni appointed as MD effective 24 June 2024, boosting investor confidence.

- Previous leadership gaps negatively impacted stock performance.
Outlook

Experts and Vaterans forecasted Navin Fluorine is to deliver revenue/EBITDA/PAT CAGR of 23%/34%/39% over FY24-26. increasing use of fluorine in various sectors supports this growth. stock, currently trading at 38x FY26E EPS of ₹ 89, is valued at 35x FY26E EPS by analysts.

Risks

- Recent insider selling may raise concerns about valuation.
- Historical management instability.

Q4FY24 Highlights

1. Sales increase reflects availability of full quarter capacity at Dahej, higher utilization at Surat & addition of new molecules.

2. Molecule added at Dahej; 2 molecules added in Surat, (incl. performance material molecule for US major), 204, 257 Q4FY23 Q4FY24 +26%.

3. Capex of ₹ 30 crores towards development of completely new capability in Surat is on track & is expected to generate revenue from FY25.

Conclusion

With promising growth prospects, robust financial performance, & strategic management appointments, Navin Fluorine International presents compelling investment opportunity despite some risks.