Motilal Oswal has maintained a ‘Neutral’ stance on Navin Fluorine International, setting a target price of ₹5,100, slightly below the current market price of ₹5,172. The brokerage remains cautious despite steady earnings visibility, citing valuation concerns and the company’s ongoing investment cycle.
Strategic expansion underpins earnings outlook
MOSL highlighted that Navin Fluorine’s earnings visibility is supported by its strategic expansion plans. The company has planned a capex outlay of ₹700–1,000 crore, which it expects to execute without compromising its return ratios.
The brokerage noted that the focus remains on scaling up the hydrofluoric acid (HF) business, including electronic-grade HF through a tie-up with Buss ChemTech.
CDMO and Advanced Materials growth drivers
The contract development and manufacturing organization (CDMO) segment is gaining momentum. Phase 1 is already completed, with 5–6 molecules in the pipeline. Phase 2 is expected to follow soon with a utilization ramp-up of 60–65%.
Advanced Materials are also expected to become a key long-term growth lever, with the segment targeted to contribute around 15% of overall revenue by FY30.
Growth projections and valuations
MOSL estimates a CAGR of 28% in revenue, 37% in EBITDA, and 41% in PAT over FY25–27. However, the valuation appears rich, with the stock trading at ~46x FY27E EPS and ~27x FY27E EV/EBITDA, leading to the neutral stance.
Disclaimer: The views expressed in this article are based on brokerage reports and do not represent the opinion of this publication. Investors are advised to consult their financial advisors before making any investment decisions.
