This multibagger chemical stock surges after big deal win

Market


Shares of Navin Fluorine today jumped over 3% to 3,603 after the company signed a 800 crore multi-year agreement for supply of key agro-chemical fluoro-intermediate. Navin Fluorine International is one of the largest manufacturers of fluorochemicals in India. The stock has been a multi-bagger, surging over 650% over last five years.

Ravi Singh, Head of Research & Vice President, ShareIndia, says the deal win will be a tailwind for Navin Fluorine stock. “After this 800 crore deal in key Agro chemicals products, Navin Flourine is expected to give 10-15% return in near term,” he said.

“The deal will strengthen Navin Fluorine’s product portfolio and customer relation. It will also upgrade of existing plants with an investment worth 125 crore. Investors can look at buying zone of 3321 levels for the target price 4000,” said Manoj Dalmia, Founder and Director, Proficient Equities Limited.

The company on Wednesday announced that its wholly owned subsidiary Navin Fluorine Advanced Sciences Limited has entered into a multi-year agreement with a large multinational company for manufacture and supply of a key agro-chemical fluoro-intermediate.

“NFASL has entered into approx. Rs. 800 crore agreement for manufacture and supply of key agro-chemical fluoro-intermediate over a period of 5 years. This project will strengthen our product offerings as well as customer relationships along with providing building blocks for future growth,” Navin Fluorine said. The project will entail an investment of Rs. 125 crore, including an approximate investment of Rs. 14 crore for expansion of effluent treatment plant.

The facility will be located at Dahej, Gujarat, and will be funded through a mix of internal accruals and debt and Navin Fluorine said supplies are expected to commence by end of FY23.

“The deal will strengthen Navin Fluorine’s product portfolio and customer relation. It will also upgrade of existing plants with an investment worth 125 crore. Investors can look at buying zone of 3321 levels for the target price 4000,” said Manoj Dalmia, Founder and Director, Proficient Equities Limited.

Navin Fluorine shares had corrected sharply since hitting a new high of 4,212 in October this year after reporting a profit drop in the first September quarter. The margin was impacted negatively on a year-on-year basis, owing to higher raw material costs, increased employee cost, higher maintenance expenses, and elevated freight cost, HDFC Securities said in a October report. However, the brokerage had retained its add rating on add rating on Navin Fluorine shares on the back of earnings visibility, given long-term contracts, and tilt in sales mix towards high-margin high-value business.

Earlier this month, Jefferies had initiated coverage on Navin Fluorine with a Buy recommendation, owing to accelerating earnings and optionality from new product wins. 

 

 

 

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint.
Download
our App Now!!



Source link

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments