Navin Fluorine Worldwide Ltd – Leaders in Fluorine

Navin Fluorine Worldwide Ltd. is among the largest Indian producers of specialty fluorochemicals. The corporate’s choices embody a spread of fluorine-based intermediaries, specialty chemical substances, inorganic chemical substances and contract analysis providers. Established in 1998 and headquartered in Mumbai, the corporate operates one of many largest built-in fluorochemicals complexes with 3 manufacturing amenities in India and 1 in UK. It produces 60+ fluorinated merchandise for home and worldwide clients.

Merchandise and Providers

The corporate has 3 most important strategic enterprise models – Excessive Efficiency Merchandise (HPP), specialty fluorides, and Contract Improvement and Manufacturing Group (CDMO). The merchandise provided by the corporate majorly includes of artificial cryolite, fluorocarbon gases, hydrofluoric acid and different chemical substances.

Subsidiaries: As of FY24, the corporate has 6 subsidiaries and 1 three way partnership.

Funding Rationale

• Progress methods – The corporate has signed a strategic settlement with The Chemours Firm to fabricate Opteon, a proprietary two-phase immersion cooling fluid designed to fulfill the rising demand from superior information facilities and AI {hardware} for high-performance, sustainable, and cost-effective cooling options. To assist this initiative, the corporate is establishing a producing facility at its Surat plant, with operations anticipated to start in Q1FY27. This marks the corporate’s first foray into the superior supplies sector. Moreover, the corporate has partnered with Buss ChemTech AG of Switzerland as its expertise collaborator for the commercialization of Photo voltaic and Digital Grade HF. It additionally plans to launch two new fluoro intermediates for its world agrochemical companions in FY26.

• Growth plans – In FY25, the corporate efficiently commercialized the Surat R32(II) mission, including 45,000 TPA of manufacturing capability. It additionally commenced operations at its new fluoro specialty chemical facility in Dahej, which has an estimated peak income potential of Rs.600 crore each year. In the meantime, development is underway for a brand new cGMP4 facility in Dewas, with commercialization focused for Q3FY26. This facility will improve the corporate’s CDMO capabilities to higher serve world pharmaceutical shoppers. Moreover, the corporate is investing Rs.450 crore in a brand new AHF plant, anticipated to be accomplished by Q2FY26.

• Q4FY25 – Throughout Q4FY25, the corporate generated a income of Rs.701 crore, reaching a rise of 16% as in comparison with the Rs.602 crore of Q4FY24. This progress was pushed by robust performances within the HPP and CDMO segments, which grew by 10% and 141% respectively. EBITDA improved by 63% YoY, from Rs.110 crore to Rs.179 crore. Web revenue stood at Rs.95 crore, a rise of 36% from Rs.70 crore of Q4FY24. Margins expanded YoY, EBITDA margin from 18% to 26% and internet revenue margin from 12% to 14%. Repeated and new order wins and robust execution capabilities throughout all verticals was instrumental on this efficiency.

• FY25 – Throughout the monetary 12 months, firm’s income elevated by 14% to Rs.2,349 crore, working revenue elevated by 34% to Rs.534 crore and internet revenue elevated by 7% to Rs.289 crore.
• Monetary Efficiency – The income and internet revenue CAGR of the corporate for the previous 3 years is round 17% and three% between FY23-FY25. TTM gross sales and internet revenue progress is at 14% and 25% respectively. The three-year common ROE and ROCE for the corporate is round 13% and 14% throughout FY23-25. The corporate has a wholesome capital construction with a debt-to-equity ratio of 0.56.

Trade

India’s chemical business is very diversified, producing over 80,000 merchandise. It ranks sixth globally and third in Asia, contributing 7% to the nation’s GDP. Valued at US$ 220 billion, the business is predicted to develop to US$ 300 billion by 2030 and US$ 1 trillion by 2040, pushed by robust manufacturing capabilities and rising home and world demand. Specialty chemical corporations in India are increasing capability to capitalize on this progress. The worldwide fluorochemicals market, valued at US$ 28.7 billion in 2023, is projected to achieve US$ 41.35 billion by 2030, rising at a CAGR of 5.35%. Fluorochemicals have wide-ranging functions throughout refrigeration, automotive, electronics, textiles, agriculture, and prescribed drugs.

Progress Drivers

• Below the Union Finances 2025-26, the federal government allotted Rs.1,61,965 crore (US$ 18.7 billion) to the Ministry of Chemical substances and Fertilizers.
• 100% FDI is allowed below the automated route within the chemical substances sector with just a few exceptions that embrace hazardous chemical substances.
• Ministry of Chemical substances and Fertilisers is working in direction of implementing the Manufacturing Linked Incentive (PLI) for the specialty chemical substances sector.

Peer Evaluation

Opponents: Gujarat Fluorochemicals Ltd, Anupam Rasayan India Ltd, and many others.

In comparison with its opponents, the corporate has generated secure returns on invested capital, reflecting prudent capital allocation. Its constant gross sales progress suggests rising market penetration.

Outlook

Navin Fluorine is well-positioned for progress, supported by robust order e book visibility anchored by multi-year contracts. As market adoption accelerates, the strategic partnership with Chemours is predicted to evolve additional, with each corporations prone to discover alternatives to fulfill rising demand. The collaboration with Chemours marks the corporate’s entry into a brand new enterprise vertical, reinforcing its long-term progress technique. The CDMO enterprise continues to reveal strong momentum with a wholesome order pipeline. The corporate stays targeted on advancing a portfolio of 10 – 15 business or late-stage merchandise with important scale-up potential. For FY26, the corporate is sustaining an EBITDA margin steerage of 25%.

Valuation

We consider the corporate is poised to maintain its progress momentum, given its entry into area of interest markets backed by robust capability enlargement plans. We suggest a BUY ranking within the inventory with the goal worth (TP) of Rs.5,314, 51x FY27E EPS.

SWOT Evaluation

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