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Business News/ Markets / Navin Fluorine: A good result to keep a track for the future

Navin Fluorine: A good result to keep a track for the future

Navin Fluorine International Ltd. has indicated a slowdown due to global recession, however their strategic investments and strong execution have indicated a strong outlook for the future.

An experiment underway at one of the labs (HT_PRINT)Premium
An experiment underway at one of the labs (HT_PRINT)

Manufacturing plants strategically located closer to major ports strong global partners including pharma and agro innovators. One of largest integrated specialty fluorochemical companies in India. Over 50 years of expertise in Handling Fluorine Built “India’s only plant with high pressure fluorination capabilities with cGMP compliance" for CDMO Business.

Chemical complex at Surat spread over 135 acres, houses Refrigerant, Inorganic & Specialty Chemicals Plants. cGMP Compliant facility for CDMO in Dewas. New Greenfield Investment commissioned in Dahej. 

Backward integration for Raw material through 25% JV partner in the only Fluorspar beneficiation company in India. Diversified sourcing of Fluorspar away from China. Pioneered Manufacturing of Refrigerant Gases in India. Over 45 years of experience in handling Fluorine. Extensive expertise focusing on specialty fluorine chemistry.

Navin Fluorine International Ltd
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Navin Fluorine International Ltd

The company has indicated a slowdown expected in near term due to global recession which might affect the HPP & specialty chemical demand. Navin Fluorine International Ltd (NFIL) Q3FY23 recorded outstanding results as plant commissioning and capacity utilisation levels exceeded, higher share of exports supported margins.

Company will benefit from India manufacturing growth particularly from the CSM/CDMO business growth. With improved margins in its traditional portfolio, strong execution & judicious capex to support future growth.

Specialty chemical grows 22% YoY on back of healthy exports - The MPP and dedicated plant for agrochemical intermediate started during Q3FY23 and supplied the first batches of commercial products, and the company focuses on increasing share of non-agro products.

CDMO vertical to do well in CY23 – Company expects relatively stronger demand in CY23 & company is consciously trying to identify and develop partnerships and projects on the performance material side. More number of early stage opportunities, increased the number of new customers to aid growth in the CDMO segment.

Plant commissioning and setup on track, further capex plan indicated in 3 key segments - Three of NFIL plants i.e. HPP, MPP and the one dedicated to Agrochemical Intermediate started commercial production in Q3FY23. New HPP plant in Dahej achieved close to designed capacity in December.

New project in Surat to start production from Q2FY24. Apart from these, the company plans to take 3 other projects (one will be HF, another will be cGMP4 and third another one in specialty) to board for proposal. Rs 200 crore plus outlay for each project.

Strong revenue growth aided by contracts

Consolidated revenues rose 49% YoY to Rs 5.6 bn driven by 64% growth in the HPP segment to Rs 2.5 bn, which also includes revenues from Honeywell contract. Specialty chemical revenues were up 22% YoY to Rs 1.9 bn on dedicated plant contributing one-month revenue.

Company has commercialised one molecule in the MPP-2 plant. CDMO revenues are lumpy and have grown 2.1x YoY to Rs 1.3 bn. Honeywell plant has reached peak utilisation but has a 20% debottlenecking opportunity which should come in the next few quarters.

R-32 will add to revenues from Q2FY24. Specialty chemical revenues will benefit from ramp-up to full utilisation in the agrochemical-dedicated plant, and MPP-2 will see addition of two molecules in the next quarter. One more molecule will be added in H2CY24. The Fluoro Molecule plant will be commissioned in early CY24. Revenue growth, excluding projects, has been underwhelming with domestic revenues down 22% YoY.

Gross margin expanded by 70 bps YoY to 56.3% benefiting partly from higher CRAMS revenue. Honeywell contract pricing has been increased in CY22, and the company expects prices to be stable in CY23, which has also helped margins. Employee and other costs have grown 46% and 42% YoY respectively. EBITDA has increased 58% YoY to Rs 1.6 bn and EBITDA margin came in at 27.6%. Net profit jumped 55% YoY to Rs 1 bn. Revenue growth drivers over next two years.

  1. NFIL plans to commence production at its R-32 plant in Q2FY24 with revenue potential of Rs2bn (4 ktpa capacity) 2) 20% debottlenecking in HPP (Rs 0.9 bn revenue)
  2. Dedicated agro-intermediate plant (will add addition quarterly revenues of Rs300mn)
  3. MPP-2 plant (can add Rs 1.5 bn-2 bn in revenues in FY24)
  4. CDMO (can generate incremental revenues of Rs 1 bn in FY24).

New fluoro-molecule plant, with revenue potential of Rs 6 bn p.a., will commence production in end-FY24, and is expected to reach full utilisation in FY26. It will start adding to revenues only in FY25 and onward.

Company has three immediate capex plans

  1. HF plant, which will increase capacity 3x.
  2. cGMP-4 (where company has made good progress)
  3. One plant in specialty chemicals (where NFIL is focused on performance products and aims to diversify from agro and pharma intermediates)

Three of their plants i.e. HPP, MPP and the one dedicated to agrochemical intermediate started commercial production.

New milestones achieved - Quarterly consolidated revenues crossed Rs. 500 Crores and Operating PBT crossed Rs. 100 Crores.

Performance to be now tracked on a consolidated basis. Consolidated revenues include performance of their subsidiaries like Navin Fluorine Advanced Sciences Limited (NFASL).


  • Global recessionary environment, especially a long recession could affect demand for upstream players.
  • Price fluctuation in key raw materials & key products.
  • Delay in capex & commercialization of plants.

    Shuchi Nahar is a Certified Research Analyst. She can be found on Twitter at @shuchi_nahar

Note: This article is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related investment-related decision.


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Published: 25 Feb 2023, 09:58 AM IST
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