Emkay Global Financial's report on Navin Fluorine International
NFIL's standalone sales were above our estimates (+8.5% yoy). Growth in overseas markets boosted the performance of Specialty Chemicals (51.5% yoy) and CRAMS (26% yoy), whereas R-gas and inorganic fluoride were impacted by the lockdown in March. EBITDA grew 28.7% yoy, with margin expansion of 398bps yoy, due to lower raw material costs and improved product mix (higher contribution from Specialty Chemicals and CRAMS). Gross margins expanded 430bps yoy. Management is confident of strong performance from CRAMS and Specialty Chemicals segments on the back of strong order books in both the segments. They are evaluating scope for capex in Specialty Chemicals and likely to announce in Q1FY21.
Outlook
We remain upbeat on the stock on the back of strong long-term outlook in the Speciality Chemicals segment, CRAMS improvement and a large order win. We maintain our Buy rating on the stock, with revised TP of Rs1850 (29x June'22E EPS) and OW in our EAP.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!