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Navin Flourine International

Changing its gear

Navin Fluorine signed a 7 year exclusive supply contract
with a global company for High Performance Product
(HPP) having a total revenue potential of Rs 29bn
starting Q4FY22. The product will be manufactured at
the recently announced greenfield plant at Dahej.
 Exclusive supply contract signed for 7 years: NFIL
(Navin Flourine International)entered into an exclusive
supply agreement with aglobal company for the manufacture
and supply of HPP in Fluoro chemicals. This product is
technically and application-wise completely different from NFIL’s
current product portfolio. The deal marks its foray
into a new range of products within fluoro chemicals.

 Better earnings visibility and tilt in sales mix
towards customized products: The deal will
strengthen NFIL’s global clientele further and provide
greater visibility for a sustained long term growth,
protecting earnings from wide fluctuations. Besides,
the supply pact will further boost sales mix towards
customized product supply. Supplies are guided to
begin from 4QFY22 and should generate revenues of
~Rs 4bn p.a. (i.e ~40% of FY20E revenues), which will
be distributed evenly over the tenure of the contract.

 Dedicated Green field facility at Dahej for supply:
NFIL will be investing USD 51.5mn (~Rs 3.65bn) to set
up the manufacturing facility and ~USD 10mn (Rs
0.71bn) for a captive power plant. The funding will
initially be from internal accruals and debt may
subsequently be raised. The plant will be built on the
technology provided by the customer without a
royalty payment. NFIL will execute this capex and the
project through its 100% subsidiary, Navin Fluorine
Advanced Sciences to avail tax benefits u/s 115BAA.


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I am v new to the chemical sector and really don’t know anything but I had some observations on the fluorine market that maybe some of the seniors can held address. The entire global flurochemical market is estimated to be about $20-25 billion currently growing at 3-4% annually. As per my research, the biggest players in the speciality fluorochemical space are Honeywell, Chemours (DuPont), Daikin, Solvay, Asahi Glass Corporation and 3M (Dyneon). The total flurochemical sales of these companies in 2019 was ~ $15 bn, roughly equally split between them at $ 2-5 bn each (75%+ market share). Fluorochemicals was less than 10% for all, except Chemours and Solvay where it has about half the business. Simply translating the multiples on their overall business to the fluorochemicals sub segment , market cap of these verticals is about ~$3 bn on average , with Honeywell at $9 bn.

Navin Fluorines current market cap is about $1.5 bn with about $150 million in sales. Refrigerant business is an oligopoly in India and HF acid is a commodity input. India has no captive fluorspar production and relies heavily on China for feedstock (China has 55%+ share of global fluorspar production) though we are diversifying to Kenya and South Africa. I’m uncertain that current valuations leave any room for growth over the next 5-10 years as the overall fluorochemical market appears small and oligopolistic at the top , and the size of companies and their market caps don’t provide any cushion - Navin is 1/20th the size and 80% of the average market cap. Even getting to a $1 billion in this market looks to be a real challenge if you’re going up against the giants above - R&D spends seem to be just 2-5% so that means the downstream CRAMs market for this industry would be capped at less than $1 billion globally for this market. Navin’s CRAMS has a wider base with life sciences cos, but unsure of what services they provide exactly and how much of a pharma R&D budgets would be devoted to fluorine , which from what I gather improves absorption of APIs.

This may be a naive analysis and I may be missing something obvious, do please correct me, but seems at first glance to be v richly priced.


ICICI Direct has initiated coverage on Navin Fluorine.

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Nirmal Bang has initiated coverage on Navin Fluorine.


Sujay/others, any thoughts on difference in the P/E ratio mentioned for Navin Fluoro (fy 20, 33 and fy 21 43) in the reports and in screener/ratestar(around 24) . Both SRF and Navin fluoro are by their own admission overvalued, yet want folks to invest.The idea is to wait patiently. Covid gave an opportunity, but Navin fluoro did not go down much, Navin fluoro looks a better bet with zero debt and singular focus on fluorine chemistry.

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Isn’t this positive for Navin Flourine?
Please share your thoughts, if you think it is not positive.
Disc: Invested.

this news is positive for srf and gujarat fluorochemicals and not for navin and navin makes r22 which is banned in india for RAC usage and company uses r22 gas for feedstock as propellants in its plant

Cash flow from operation is very low as compare to net profit for 10yrs.pls share if it has valid reason.