Navin Fluorine's Q4 FY25 revenue was up 16.4% YoY/15.6% QoQ to Rs 7 billion aided by growth across segments. HPP segment revenue stood at Rs 3.3 billion, up 9.8% YoY/6.5% QoQ. Domestic HPP revenue jumped 30.7% YoY on strong off-take in R-32 and better realisations in both R-32 and R-22. However, HPP exports contracted 5.4% YoY on optimal utilisation of HFO plant as contracted; and phase-down (32.5% cut from baseline capacity) of R-22 effective Jan'25.
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Navin Fluorine International Ltd.'s business is shaping up well with visible scaling up of pharma contract development manufacturing organisation and multiple latestage contracts in sight. Agro-chemicals' intermediate capacities are ramping up with new product campaigns rising.
Refgas has capacity expansion in clean R-32, and supply contract for HFO. And now, Navin Fluorine is foraying into advance materials with initial capacities of two-phase immersion cooling fluid, addressing demand from adoption of AI chips, and N3 and N5 grade HF, which has applications in solar and electronics. These diversifications are helping Navin Fluorine increase total addressable market and improve business resilience.
We tweak our FY26E/FY27E EPS and reduced our target price to Rs 4,450 (from Rs 4,490) with an unchanged multiple at 40x FY27E EPS.
We downgrade our rating to Hold (from Buy). Inherently, we remain impressed by the evolution of Navin Fluorine's business and future outlook, and management walking the talk; downgrade is only on fair valuations.
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