Shares of Navin Fluorine International Ltd. are trading with gains of over 6% on Thursday after the company’s September quarter results saw growth on the topline and EBITDA front in what has been a challenging quarter for specialty chemical companies.
Revenue for the quarter increased by 9.9% from last year to ₹518 crore, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 9.2% year-on-year to ₹107 crore.
EBITDA margin for the quarter remained flat at 20.7% from 20.8% in the year-ago period. On a sequential basis, revenue fell by 1%, EBITDA increased by 7%, while net profit grew by 15%.
Within segments, the company’s Specialty Chemicals segment revenue fell 15% from last year to ₹158 crore, while revenue for the High Performance Products (HPP) business increased by 23% from last year to ₹293 crore. Revenue for the CDMO business also increased by 41% to ₹68 crore.
In its earnings call, the management of Navin Fluorine said that there has been continued competitive pressure witnessed globally during the quarter. However, the second half sees strong order visibility on firm orders.
For the Pharma business, the company has started producing one of the traditional molecules based on the request of a customer.
Brokerage firm Citi maintained its “buy” rating on Navin Fluorine but cut its price target to ₹3,800 from ₹4,350 earlier. It said that while the specialty chemicals business has been impacted by increased competitive intensity, the commissioning and ramp-up of the agro specialty plant, a pick-up in the CDMO business and expected commissioning of the new R32 plant in February 2025 augur well for the company.
Jefferies though, maintained its “underperform” recommendation on the stock with a price target of ₹2,950. The brokerage said that at 41 times one-year forward price-to-earnings, the risk-reward on the stock is “unfavourable.”
It has also cut its financial year 2025 and 2026 net profit estimates by 9% and 8% respectively due to elevated expectations and softer growth in the specialty chemicals business.
Emkay too has a “reduce” rating on Navin Fluorine, with a price target of ₹3,500. It believes that growth in the High Performance Products (HPP) business will be driven by the new R32 plant in financial year 2026.
Out of the 28 analysts that have coverage on Navin Fluorine, 19 of them have a “buy” rating on the stock, four say “hold”, while five of them have a “sell” rating on the stock.
Shares of Navin Fluorine are off the highs of the day but are trading with gains of 4.7% at ₹3,462. The stock is down 10% so far in 2024.
Content retrieved from: https://www.cnbctv18.com/market/navin-fluorine-share-price-q2-results-global-competition-r32-unit-timeline-brokerages-target-19498165.htm.
