CITI has retained its ‘sell’ rating on Navin Fluorine International Limited (NFIL) while raising the target price to ₹4,750 from an earlier level, citing that the recent strong rally in the stock already factors in most of the near-term upside.
In its Q1FY26 review, CITI noted that Navin Fluorine’s EBITDA more than doubled year-on-year, rising 2.1x, and grew 16% sequentially. The company reported an EBITDA margin of 28.5%, up from 25.5% in the previous quarter and 19.2% in Q1FY25. This margin outperformance, despite revenues being in line with estimates, was attributed primarily to operating leverage, which accounted for about two-thirds of the year-on-year margin expansion. The remaining contribution came from improved pricing, as per management commentary.
CITI also highlighted the company’s aggressive capital deployment over the past three years, with multiple project commissions—including R32, HFO, and Agri-chemicals—leading to over a 4x increase in gross block compared to FY22.
However, with the stock already up 60% year-to-date and currently trading at 28x FY27 EV/EBITDA, the brokerage believes that much of the future growth potential is already priced in, justifying the continued ‘sell’ stance.
At the time of the report, Navin Fluorine shares were trading at ₹5,198.
Disclaimer: The views expressed in this article are based on brokerage reports and do not constitute investment advice. Please consult your financial advisor before making any investment decisions.
