Chemicals Sector Midcap Stock To Buy, Gave Over 500% Return In 5 Yrs: HDFC Securities

Leading brokerage firm HDFC Securities has placed a "Buy" on Navin Fluorine International Ltd. with a target price of Rs 5,471 apiece.

The stock is likely to deliver a decent return of 16% purchased at the current market price, considering the given target price of the stock by the brokerage firm.

Navin Fluorine International is a midcap company operating in the chemicals sector. It has a market capitalisation of Rs 23,432.04 crore.

Navin Fluorine International's Stock Outlook

The stock of Navin Fluorine International closed 0.12% lower at Rs 4,726.95 apiece. It recorded its 52 week high on 16 September 2022 at Rs 4,848.35 apiece and 52 week low on 26 May 2022 at Rs 3,432.85 apiece, respectively.

In a week gains 4.3% and 11.44% in 1 month, respectively. It has given 17.26% positive return in the past 1 year. In 3 years it has given 214.62% and in 5 years it has given 507.23% positive return.

Buy for a target price of Rs 5,471 apiece

HDFC Securities said, "We retain our BUY rating on Navin Fluorine International Ltd (NFIL) with a target price of INR 5,471 on the back of (1) earnings visibility, given long-term contracts; (2) tilt in sales mix towards better margin products; (3) capacity expansion-led growth; and (4) strong R&D infrastructure. The stock is currently trading at 29x FY25E EPS."

It added, "We recently visited Navin Fluorine Advanced Sciences Ltd's (NFASL, a wholly-owned subsidiary of NFIL) plant which is spread over ~75 acres of land in Dahej, Gujarat. The plant is designed with the philosophy of sustainability and keeping in mind the various regulations that are imposed now and that can be imposed in the future in terms of safety, environment, waste management, structure, etc. The plant is a self-sustainable unit where the company has built the capability to produce all its raw materials in-house in case of any disruption at its supplier's end which ensures business continuity."

It further added, "We expect the EBITDA margin to improve by 636bps from 27% in FY23E to 33% in FY25E, owing to the increase in the value-added products in the product portfolio with superior margins. We expect NFIL's PAT to grow at a 47% CAGR over FY23-25E, led by a 47% CAGR in EBITDA."

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.