Jefferies bullish on Navin Fluorine as it expects Rs 2,000 cr capex to drive EPS growth

Global brokerage firm Jefferies shared a “buy” rating for Navin Fluorine and shared a target price of Rs 5,280 per share, which implies 17 percent potential upside from current levels. The brokerage believes the company is well-positioned to capitalize on Rs 2,000 crore worth of capital expenditure (capex) over the long term..

Jefferies highlighted that the Rs 2,000 crore capex, which has been commissioned over the past three years, is expected to be monetized by entering into long-term contracts. This should enhance asset turnover and is projected to drive a 35 percent compound annual growth rate (CAGR) in earnings per share (EPS) between financial year 2025 and financial year 2027.

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The brokerage also pointed to a healthy pipeline of new contracts in the specialty chemicals segment, contract development and manufacturing organization (CDMO), and high-performance products (HPP). These new agreements are expected to materialize in financial year 2026 and provide strong growth visibility from financial year 2028 onward.

In addition, Jefferies remains optimistic about the company’s R32 refrigerant gas business, despite the emergence of new capacities in the market. The company expects R32 prices to remain firm in the near term.

Meanwhile, analysts at Morgan Stanley have also upgraded their stance on Navin Fluorine, moving from an ‘Under-weight’ to an ‘Equal-weight’ rating. The foreign brokerage revised its target price upward to Rs 4,160 from Rs 3,242. Morgan Stanley acknowledged that although financial year 2025 has been marked by tepid demand and pricing pressures, the sector’s outlook is now turning more favorable.

Specifically for Navin Fluorine, Morgan Stanley raised the valuation multiple for its contract manufacturing and high-performance segments to twenty-five times earnings, up from the earlier range of twenty to twenty-two times. This upward revision is backed by robust operational performance, improved margin profile, and a strong order book.

In the quarter ended March 2025, the company reported a 35.7 percent increase in consolidated net profit, reaching Rs 95 crore. Revenue from operations rose by 16.45 percent to Rs 701 crore, compared to Rs 602 crore in the corresponding period last year.

The chemical stock has gained 37 percent so far in 2025, significantly outperforming the Nifty 50 index, which has risen by just 5 percent.

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