Buy Navin Fluorine International; target of Rs 834: Dolat Capital

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Dolat Capital's research report on Navin Fluorine International

Navin fluorine international ltd reported Sales/EBITDA/PAT de-growth of 0.5/3.8/0.3% YoY to ` 2.41bn/607mn/395mn. Sales were lower than our expectations by 7.5% (D.est: ` 2.6bn), while EBITDA/PAT came in-line with estimates (D.est: ` 577/391mn). Gross margins improved on a sequential basis by 230 bps, while there was a drop on a YoY basis of 250 bps to 52.5%. The company has taken price hikes in Q1FY20 and expects gross margins to be sustainable with fluorspar prices softening.

Outlook

Given the recent correction in the stock price and compelling valuations, NFIL is trading at 14.2x FY21E EPS at the CMP. We recommend investors to buy NFIL. We have a target price of ` 834/share (SOTP – EV/EBITDA based valuation tabulated in exhibit 1.

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