At a Glance

Once the poster child of India’s fluorochemicals boom, Navin Fluorine has hit a bit of a slowdown. Profits are crawling, margins are stabilizing (read: falling and then recovering), and yet the stock trades at an ahem divine 80x P/E. But does its capex in high-value fluorination and pharma intermediates still justify the premium? Let’s dissect the fluorine fantasy.

🧪 Act 1: From Refrigerants to Research

Navin Fluorine’s business model is like Breaking Bad but legal:

• 🌬️ Refrigerant Gases (Legacy business)
• 🧪 Inorganic & Specialty Fluorochemicals
• 💊 CRAMS / CDMO: Pharma intermediates, custom synthesis
• 🚀 High-Performance Product (HPP) segment — their newest bet

It’s not a “commodity chemicals” stock. NFIL sits in the “specialty + science + future optionality” bucket.

And oh, they’ve been fluorinating since 1967. If you’ve ever felt cold thanks to a fridge in India, chances are Navin Fluorine had something to do with it.

📊 Act 2: The Last 5 Years – A Fluoro-Coaster

⬇️ What just happened?

• FY24 was the problem child → margins fell, PAT dropped 28%
• FY25 shows some recovery, but still far from FY23 peak
• OPM back to 23%, but net profit is just ₹289 Cr

🧪 Fun fact:

NFIL’s FY23 EBITDA was ₹550 Cr, but FY24 dropped to ₹399 Cr, and FY25 barely recovered to ₹534 Cr

🚧 Act 3: Capex, Capex, Capex

NFIL has been throwing money at future growth like a Bollywood director at a flop sequel.

• FY23–25: Capex of ₹2,700+ Cr
• CWIP in FY25 = ₹350 Cr
• Fixed Assets more than tripled in 3 years (₹556 Cr → ₹2,742 Cr)

Where’s it going?

• Dahej and Surat expansion for HPP and CDMO
• Specialty Fluorination capacity build-out
• High-margin pharma intermediates in the pipeline

🧠 All cool — but as any investor will tell you: Capex ≠ cash flow until proven otherwise.

🧮 Act 4: Valuation – Coolant Level Too High?

And here’s the killer — the 5-year PAT CAGR is -7% 😬
But stock price CAGR over 5 years? +24%
Talk about hope rally over earnings reality.

✅ Act 5: What’s Still Working?

The Positives:

• 📈 Revenue back to growth mode: ₹2,349 Cr FY25 (↑14% YoY)
• 🧪 Recovery in OPM: Back to 23% after FY24 slump
• 💸 Still generates ₹500+ Cr EBITDA
• 🤝 Steady hand in management (Vishad Mafatlal still at the helm)
• 🧠 Strategic push into high-value CRAMS and pharma

🚨 Act 6: What Investors Should Worry About

• ❌ Profit degrowth over 5 years
• ❌ ROCE at just 12% post capex binge — low for a specialty player
• ❌ Free cash flows are negative — huge reinvestment need
• ❌ Still trades at 80x earnings — priced like it’s growing at 30%, not 3%

🧾 Act 7: Fair Value Calculation

🧮 Method 1: P/E Normalization

• EPS FY25 = ₹58.19
• Assign fair P/E = 35x (in-line with Deepak Nitrite / Atul / Vinati)
• FV = ₹2,036

🧮 Method 2: EV/EBITDA

• EBITDA = ₹534 Cr
• EV/EBITDA peer avg = 18–22x
• EV = ~₹10,000 Cr
• Equity Value = ~₹10,000 Cr (debt minor)
• FV = ₹2,000–2,200

🎯 Final Fair Value Range: ₹2,000 – ₹2,200/share
(Current market price = ₹4,685) → 🚨 Overvalued by 2x

👥 Shareholding Trends

👀 DIIs love this stock (doubled stake in 3 years)
📉 FIIs are back above 20% after a temporary dip
💼 Promoters have been steady, no buying, no selling

⚡ TL;DR for Edu Chacha Investors

• 🧪 Navin Fluorine = India’s OG fluorochemicals player with R&D edge
• 🚀 Big capex done, high-value CDMO & pharma launches expected soon
• 📉 But profits have barely grown in 5 years
• 💰 At 80x P/E, it’s more fluorine bubble than fluorine bargain

🎨 Thumbnail Prompt

“A cool-toned lab split into two halves — one side with a futuristic fluorine reactor and money flying into pipes, the other side showing a flat earnings chart and confused investor with chemical goggles. Text overlay: ‘NAVIN FLUORINE: PRICEY OR PURE PLAY?’ EduInvesting logo bottom right. Clean, science-themed, widescreen (16:9), 200KB.”

✍️ Written by Prashant | 📅 22 June 2025
Tags: Navin Fluorine, NFIL, Specialty Chemicals, Fluorochemicals, CRAMS, CDMO, Pharma Intermediates, EduInvesting, High Valuation Stocks, 5-Year Recap