Navin Fluorine - Dahej Site To Enable Strong, Sustainable Growth: Prabhudas Lilladher

Prabhudas Lilladher Report

We visited Dahej site of Navin Fluorine Advanced Sciences Ltd.; Navin Fluorine International Ltd.’s 100% subsidiary) spread over ~75 acres plot housing-

• one dedicated plant producing two products (hydrofluoroolefin and its intermediate for Honeywell),

• one dedicated plant producing an intermediate for an agrochemical customer and

• a multi-purpose plant currently manufacturing three products (multiple customers).

The site reflects extremely strong project execution along with management’s futuristic thought process, as its designed to produce all raw materials in MPP’s (capability in place) and is long term self-sustainable with limited external dependence for by-product/ waste handling.

We are of the view that Navin Fluorine will grow its earnings by ~30% compound annual growth rate (over FY23- 25E) led by large capex (FY25E gross block at more than three times of FY22) and strong revenue visibility as supplies are largely under long term contracts, while Ebitda margin trajectory strengthens (closer to ~30%) as all new projects are undertaken at superior margins.

Navin Fluorine’s strong balance sheet enables large capex with only transient increase in debt.

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