Navin Fluorine targets CDMO scale and advanced materials growth through FY30

Investment View and Valuation

Axis Securities’ August 21, 2026 company update retains a BUY rating on Navin Fluorine International Ltd. and revises the target price to Rs 9,040 per share. The broker’s positive view is based on the company’s strategic expansion across High Performance Products (HPP), Specialty Chemicals, CDMO and the new Advanced Materials vertical.

Axis Securities values Navin Fluorine at 34 times FY28E EPS. The target price implies approximately 10 per cent upside from the August 20, 2026 CMP of Rs 8,220.

Advanced Materials: Emerging Growth Vertical

Management is incubating Advanced Materials as a high-margin business serving data centres, electronics, defence and semiconductor applications. By 2030, management expects the vertical to contribute 10-15 per cent of Navin Fluorine’s expanded revenue basket, potentially becoming comparable in scale with the CDMO business.

Of the 19-20 visible products, management has prioritised an initial basket of 11-12 products. Five to six products have already been qualified at the laboratory stage. The Chemours project relates to an innovative liquid-cooling product for AI hyperscalers, supplied through original equipment manufacturers. Management considers Navin Fluorine the only credible alternative to Chinese supply chains for this complex product.

CDMO Expansion and Capacity Build-out

Management expressed high confidence in approaching its US$100 million FY27 revenue target for the CDMO business. It also cited a rich pipeline, including three to four molecules expected to receive FDA approvals over the following 12 months.

The Rs 288 crore cGMP4 Phase I facility began operations in Q3 FY26. Navin Fluorine has initiated Rs 125 crore of Phase II capex, targeted for completion in Q4 FY27. Management expects this investment to achieve approximately three times asset turnover. Existing effluent treatment plant and warehouse infrastructure can support future expansion into cGMP Phase 5 and Phase 6.

HPP and Specialty Chemicals Outlook

High Performance Products

Management indicated that constructive global HFC pricing is encouraging customers to seek long-term offtake contracts for Navin Fluorine’s new capacity. Additional HFC capacity equivalent to up to 15,000 MTPA of R32 remains on track for commissioning in Q3 FY27.

Specialty Chemicals

Five new molecules are under development, including three patented products. Management indicated that these molecules collectively represent approximately 15 per cent of the expanded top line for the year. The segment will follow an infrastructure-led strategy, optimising existing Multi-Purpose Plant capacity before committing to a new MPP.

Capex and Long-Term Growth Targets

Management guided for approximately Rs 700 crore of capex in the current year and annual capex of Rs 700-1,000 crore during FY28-FY30. It is targeting a sustainable revenue CAGR of 20-25 per cent.

Navin Fluorine remains net debt positive, which management views as providing flexibility to fund organic projects and larger scale-up opportunities.

Financial Estimates

Axis Securities estimates consolidated net sales to increase from Rs 3,314 crore in FY26 to Rs 4,714 crore in FY27E and Rs 5,862 crore in FY28E. EBITDA margins are expected to remain around 33 per cent in FY27E and FY28E. The broker also forecasts improving return on capital employed (ROCE) as the company scales its businesses.