Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

ADD on Navin Fluorine International - EBITDA margin surprises positively! - HDFC Securities

Posted On: 2020-10-30 08:29:55

Mr. Nilesh Ghuge & Mr. Harshad Katkar, Institutional Research Analyst, HDFC Securities

We retain our ADD rating on NFIL with a TP of INR 2,410 on the back of (1) earnings visibility given long-term contracts and (2) tilt in sales mix towards high-margin high-value business. EBITDA/APAT were 45/78% above estimates owing to 27% higher revenue and significantly better EBITDA margin, courtesy better-than-expected contribution from the high-margin Specialty Chemicals and CRAMS business.

Financial performance: Revenue/EBITDA/APAT grew 17/38/57% YoY and 50/80/192% QoQ to INR 3,077/935/646mn. Revenue and EBITDA margin grew on the back of strong momentum in high-value business' performance. EBITDA margin surprised positively at 30.4%, the highest ever reported in the past five years. (+476/494 bps YoY/QoQ).

Segmental performance: Specialty Chemicals (33% of revenue mix) and CRAMS (32%) business units (BU) grew 9/111% YoY to INR 1020mn/990mn. The growth in Specialty Chemicals' revenue was driven by its Life Science and Crop Science segments. CRAMS BU displayed an outstanding performance due to completion of pending orders during the quarter. cGMP plants were running at over 80% utilisation in H1FY21.

Other income adjustment: (1) Marked to market gains of INR 25mn, and (2) one-off gain from investments sale of INR 2mn have been excluded from (gross) other income of INR 88mn to arrive at APAT of INR 646mn in 2Q.

Concall takeaways: (1) Disinvestment of Convergence Chemicals Private (CCPL): NFIL sold off its 49% stake in JV CCPL to Piramal Pharma for a consideration INR 651mn along with INR 79mn towards leasehold rights for GIDC land. NFIL will continue to be the key raw material supplier to CCPL and will have a perpetual license to use CCPL's technical know-how. (2) GM was down QoQ due to lower margins in the legacy business.

Change in estimates: We raised our FY21 EPS estimate by 10.6% to INR 43.6 to account the exceptional gains arising from the sale of CCPL in FY21.

DCF based valuation: Our target price is INR 2,410 (WACC 10%, terminal growth 3%). The stock is trading at 37.7x FY22E EPS.

Shares of Navin Fluorine International Limited was last trading in BSE at Rs.2241.35 as compared to the previous close of Rs. 2278. The total number of shares traded during the day was 19389 in over 3126 trades.

The stock hit an intraday high of Rs. 2339 and intraday low of 2227.35. The net turnover during the day was Rs. 44269806.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Views of HDFC Securities and Acuité Ratings & Research on Q2FY21 GDP Numbers

Rollover Report for November 2020 - December 2020: Angel Broking

Initiating Coverage on Godrej Properties - The housing factory - HDFC Securities

Burger King IPO - Angel Broking

Rollover Analysis - Record foreign inflows pushes Nifty to 13k - YES Securities

Ceramic tiles industry - Market share gains sustain for top branded players - ICICI Securities

Gas sector - CGD: Competition to hit margins, volumes and lead to derating - ICICI Securities

Cement - Prices resilient in Q3; consensus upgrades to continue - ICICI Securities

Specialty chemicals - Price trend in Sep-20 - ICICI Securities

Timken India - Q2FY21 Company Update - ICICI Direct

Upgrade in target price of IDFC First Bank - Angel Broking

Laurus Labs stake acquisition in Richore Lifesciences - Angel Broking

Shares of Lakshmi Vilas Bank (LVB) suspended from trading - Angel Broking

Initiating Coverage on Sundram Fasteners - Fastening growth - HDFC Securities

Astral Poly Technik - Scalability to further improve with storage tanks foray - ICICI Securities

Vardhman Special Steel - Q2FY21 Company Update - ICICI Direct

Initiating Coverage - Advanced Enzyme Technologies - ICICI Direct

L&T - Secures Large Contract - Nov 25, 2020 - Angel Broking

Alembic Pharmaceuticals - Tentative Approval for JV - Angel Broking

Drug launch by Lupin - Tacrolimus Capsules - Angel Broking

Gujarat Gas - Nov 25, 2020 - Angel Broking

Metropolis Healthcare - Nov 25, 2020 - Angel Broking

NTPC - Showcase of strength & competitiveness - ICICI Securities

Telecom - Market Share TRACKER - Bharti is narrowing the gap on incremental market share vs RJio - ICICI Securities

Cochin Shipyard - Q2FY21 Result Update - ICICI Direct

Engineers India - Q2FY21 Result Update - ICICI Direct

Rupee - Nov 24, 2020 - Reliance Securities

FMCG Sector Update - Recovery unlocked; lower growth divergence - HDFC Securities

Engineers India - Consultancy segment outperformance - ICICI Securities

Engineers India - Q2 FY21 Result Update - YES SECURITIES

Motherson Sumi Systems - Company Update - Virtual Investor Conference - ICICI Direct

Mutual Fund Review - November, 2020 - ICICI Direct

Sadbhav Engineering - Q2FY21 Company Update - ICICI Direct

IRB Infrastructure - Q2FY21 Company Update - ICICI Direct

Vodafone Idea fund raising - Angel Broking

Rupee - Nov 23, 2020 - Reliance Securities

Crude Oil - Nov 23, 2020 - Reliance Securities

Q2FY21 Bank Result Quick Review - Angel Broking

Banks & NBFC's Sector Update Report - Yet another watershed moment? - HDFC Securities

Galaxy Surfactants - EBITDA/kg has an upside risk - ICICI Securities

Diagnostics - COVID-19 tests continue to trend higher - ICICI Securities

Banking & Financial Services - Sector Update - Nov 22, 2020 - ICICI Direct

Dalmia Bharat Sugar - Q2FY21 Company Update - ICICI Direct

Balkrishna Industries - Industry export growth momentum continues - ICICI Securities

Covid Recovery Pulse - Festive positivity continues in auto retails, E-way bill generation improves... - ICICI Direct

Quant Pick - Exide Industries - ICICI Direct

Shankara Building Products - Q2FY21 Company Update - ICICI Direct

Triveni Engineering - Q2FY21 Company Update - ICICI Direct

Initiating Coverage on Sudarshan Chemical - Leaping into the league of giants - HDFC Securities

Earnings Wrap Q2FY21: Earnings outperform, post Covid recovery picks up steam - ICICI Direct

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019