Navin Fluorine International Limited - Company Update

27th February 2020 By Edelweiss

Navin Fluorine International Ltd (NFIL), one of the key players in the fluorochemical space in India, has entered into an INR 2,900 cr multi-year deal with a global company for manufacturing and supply of a high performance product. We believe that this is the start of a new leg of growth for the company where it establishes its fluorination capabilities in the high performance product segments. Additionally, strong growth is expected in the fluorospecialty business due to robust downstream demand as well as from their CRAMS business. With increasing adoption of the fluorine molecule in the agro/pharma industries, we believe that NFIL enjoys a sectoral tailwind which it is well positioned to capitalize on. We remain positive on NFIL owing to its strong capabilities in the niche fluorine chemistry area which should result in solid double digit growth in earnings over FY20-23. With increasing adoption of the fluorine molecule in the agro/pharma industries, we believe that NFIL enjoys a sectoral tailwind which it is well positioned to capitalize on.

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Key Highlights
  • Owing to the multiple levers of growth that NFIL enjoys, we believe the company is capable of growing at over 20% CAGR over FY20E-23E. In the near term, Specialty Chemicals and CRAMS will be the key drivers of growth with incremental growth coming from NFASL (FY23E onwards), while the legacy businesses will continue to grow at high single/low double digit rates.
  • Additionally, there could be further improvement to the earnings outlook as new deals are undertaken for NFASL/CRAMS and addition of new molecules (in specialty chemicals)/products. Management guidance during the quarterly earnings on upcoming capex plans bolster our conviction regarding the focus on growth.

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