Analysts reaffirm positive stance on Navin Fluorine, eye near-term growth

Analysts remain upbeat on Navin Fluorine's outlook, citing strong growth in the CDMO business, robust demand for R32 and HFC-32, and a solid pipeline in specialty chemicals

Analysts at Emkay Global and JM Financial remain upbeat on Navin Fluorine International (NFIL) and have retained their ratings on fluorochemical makers, citing strong near-term growth visibility and sustained outperformance. 

Emkay Global, which has retained its ‘Add’ rating on the stock, highlighted the company’s robust growth in the contract development and manufacturing organisation (CDMO) business. Emkay projects CDMO revenue to reach $100 million by FY28, with the potential to double by FY30. Similarly, JM Financial, which has reaffirmed its ‘Buy’ call on NFIL, sees the CDMO segment as a key earnings driver, buoyed by strong sales from US and EU pharma majors.

Emkay Global - Retains 'Add' Rating | Target Price ₹7,200

Analysts at Emkay Global reaffirmed their ‘Add’ rating on Navin Fluorine, setting a target price of ₹7,200 per share, following insights gained at an analyst meet with MD Nitin Kulkarni and CFO Anish Ganatra. The management provided an update on the commissioning of the 15kt R32 expansion project, scheduled for Q3FY27, which is expected to see increased demand as the industry transitions from R410a to R32/R454B. They also shared guidance for CDMO revenue to hit $100 million by FY28, with further growth anticipated by FY30.

 

"NFIL has set an ambitious $40 million revenue target from its CDMO contract with Fermion, with over 15 molecules already in the late-to-commercial stage. The specialty chemicals order-book for FY27 remains strong, driven by a ramp-up in the dedicated portion of its agro-specialty plant and the MPP debottlenecking project, both expected to contribute meaningfully in the near term," said Emkay.

 

The brokerage also emphasized that NFIL remains on track to commission its R32 plant (15ktpa capacity) by Q3FY27. Management expects healthy demand for R32, backed by the demand-supply dynamics, with R32 prices expected to remain stable in the near-to-medium term. Notably, NFIL’s domestic R32 realization is higher than export realiSation, with India’s export prices lower than China’s. Additionally, the company expects approximately 6-8kt of AHF merchant sales from its newly commissioned 40kt AHF capacity.

 

In specialty chemicals, NFIL continues to focus on asset utilisation, backward integration, and novel process routes. "The FY27 order-book visibility remains strong, with ramp-up expected in Project Nectar and increased plant utilization from 50 per cent currently to 75 per cent next year," said Emkay.

 

Further, the management reiterated its $100 million revenue target from CDMO by FY28, with the segment’s contribution expected to double by FY30. NFIL currently has 15 molecules in the late commercial stage, with therapeutic areas including respiratory, cardiology, and oncology.

JM Financial - Retains 'Buy' Rating | Target Price ₹8,270

JM Financial analysts, meanwhile, have maintained their ‘Buy’ rating on NFIL, with a target price of ₹8,270 per share (40x FY28E EPS). The brokerage expects earnings upgrades of 15-20 per cent over the next 2-3 quarters, driven by the faster-than-expected ramp-up of the CDMO business, strong sales from US and EU pharma majors, and incremental contributions from other high-margin projects.

 

"NFIL is likely to see a positive contribution from its expanded HFC-32 capacity, even if prices of ref gas decrease. The current robust prices of HFC-32 in India and China (USD 6.5-7.6/kg) should further benefit the company. Even if HFC-32 prices correct by over 50 per cent, Ebitda contribution will remain positive due to higher volumes driven by increased utilization of its expanded capacity," said JM Financial.

 

The brokerage noted that the overall growth outlook remains strong, with CDMO, specialty chemicals, and ref gas businesses expected to drive a healthy 23 per cent/21 per cent/26 per cent sales/Ebitda/EPS CAGR over FY26E-28E. The ramp-up of Project Nectar and the Chemours sales are expected to significantly contribute to the top line in the near term.  ============================ 

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