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Dolat Capital Report
We visited Navin Fluorine International Ltd.'s contract development manufacturing organisation site at Dewas (Madhya Pradesh) which is spread over 47acres, of which-
~45% area is houses CGMP I, II and III (total 220 KL), and ongoing expansion (CGMP IV – 250 KL);
~30% is green belt while the remaining is available for expansion (it can double its capacity to ~1000 KL through addition of CGMP V & VI on remaining land).
CDMO has capex outlay of Rs 2.88 billion of which Phase 1 of ~Rs 1.6 billion is underway (to complete by November 2025) and Phase-II of ~Rs 1.3 billion is planned. Expected asset turnover is two times at optimal utilization.
Management expects CDMO revenues at ~Rs 8 billion in FY27, aided by Fermion master supply agreement, wherein its drug's application expanded, driving higher revenue projections.
The company indicated revenue share of ~3% of the total, giving high revenue visibility. Another three-four projects with drugs over $1 billion revenue potential are underway.
Navin Fluorine is navigating challenges in the near-term, particularly in the specialty chemicals segment (pricing pressures; delay in commercialization).
Overall focus is on operational efficiency, innovation, and building a non-Chinese supply chain to remain competitive in global markets.
We trim our EPS estimates by 5%/7% for FY25/26 and retain ‘Accumulate' rating with revised target price of Rs 4010 (earlier Rs 4060), as we roll to Dec-26.
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