Navin Fluorine Complete Fundamental Analysis and Future Outlook
Navin Fluorine is a part of the Padmanabh Mafatlal Group and is the largest speciality fluorochemical company in India.
- It has 50+ years of experience in manufacturing speciality compounds and is currently the largest producer of refrigerant gas in India. The company operates 3 main divisions namely CRAMS, Inorganic Fluorides and Refrigerants and Specialty chemicals.
- The contract research and manufacturing services (CRAMS) is a division which focuses on R&D and commercialization of new compounds and has been generating revenue for the company since FY 2013.
- The company has been focused on both operational excellence as well and R&D in the past years. This has given them extensive expertise in speciality fluorine manufacturing.
- They have also developed a backward integration for raw material through a 25% joint venture with the only Fluorspar beneficiation company in India. This helps them to get tighter control over the supply chain and diversified sourcing away from China.
- The company has manufacturing units in Surat (Gujarat) and Dewas (Madhya Pradesh). The plants are strategically located near major ports, helping it to cater to the export markets.
- The Company’s longstanding relationships with the customers helped them to optimise raw material costs.
I have evaluated the company on 10 fundamental categories and each has been given a rating out of 5 stars. From this, I have arrived at a combined stock rating for the company.
This is the summary of the analysis. For details check the source link.
Read the complete analysis here: Navin Fluorine Shares Fundamental Analysis and Future Outlook
Some insights for the coming years from management discussion & analysis (MD&A) and con calls are as follows.
- Navin Fluorine received its largest-ever multi-year deal win which is a 7-year contract worth USD 410 Million (Approximately Rs. 3000cr) to manufacture and supply a High-Performance Product (HPP) to a large MNC. This has significantly improved the earnings expectation from the company.
- This is a completely new product for Navin Flourine and the management highlighted that the company will be the sole producer of this HPP other than the original MNC that has the patent for this product.
- The COVID-19 lockdown and Chinese Export disruption will not have any significant impact on the company apart for a few months of production loss. This is only temporary and production impact can be in double digits.
- From a long-term perspective, the outbreak will be highly beneficial for Indian Chemical companies. Navin Fluorine also stands to gain from this as it has started receiving new enquiries from companies looking forward to supply chain diversification out of China.
Overall the company indicates high growth prospects with a focus on financial stability and operational excellence.
Therefore Navin Flourine is a very good Investment considering the long term horizon.
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