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Navin Fluorine hits new high on commencement of production at Dewas plant

The stock rallied 8% to Rs 1,104.75 on Wednesday, extending its Tuesday's 4% gain on the BSE.

SI Reporter  |  Mumbai 

Illustration by Ajay Mohanty
Illustration by Ajay Mohanty

Shares of International surged 8.1 per cent to hit a new high of Rs 1,104.75 on the BSE on Wednesday, in an otherwise weak market, after commencement of commercial production at Dewas, Madhya Pradesh plant. The stock of the commodity chemicals firm surpassed its previous high of Rs 1,047, touched on December 26, 2019. The stock was at Rs 1,090.65 at close, up 6.74 per cent.

“Post successful mechanical completion and plant trials, the company's Certified Good Manufacturing Facility (cGMP) capacity addition at Dewas Plant, Madhya Pradesh has commenced commercial production with effect from January 6, 2020,” said in exchange filing on Tuesday after market hours. The stock ended 4 per cent higher yesterday. READ STATEMENT HERE

"The delay in commissioning of the new facility has resulted in a pile-up of orders, which will be executed in 2HFY20. Moreover, new customers, repeat orders from existing customers and scaling-up of existing molecules will drive future growth," analysts at HDFC Securities had said in Q2 results review.

In the past three months, outpaced the market by zooming 56 per cent, as against a 8 per cent rise in the S&P BSE Sensex.

On December 12, Navin Fluorine announced that it is planning a capex programme at Dahej (Gujarat) through a wholly owned subsidiary with an estimated aggregate capital outlay of over Rs 450 crore over the next 3–4 years.

"The legacy business should continue to grow at a slower pace as investments are largely flowing into Contract Research and Manufacturing Services (CRAMS) and Specialty chemicals. New orders in CRAMS give earnings visibility. The specialty business is also demonstrating robust traction. Both these business units will boost margins," HDFC Securities said. The stock, however, trading above the broekrage firm's 12-month target price of Rs 870 per share.

At 10:13 am, Navin Fluorine was trading 3 per cent higher at Rs 1,056 on the BSE, as against a 0.22 per cent decline in the benchmark Sensex. A combined 111,113 equity shares have changed hands on the counter on the NSE and BSE so far.

First Published: Wed, January 08 2020. 10:22 IST
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