NAVINFLUOR - Navin Fluorine International Limited Share Price

In the earnings call held on October 30, 2025, Navin Fluorine International Limited's management provided an optimistic outlook for the company moving forward. They announced a strong revenue growth of 42% for the first half of FY '26, totaling INR 1,484 crores, with Q2 alone witnessing a 46% increase to INR 758 crores. Additionally, both EBITDA and PAT more than doubled year-on-year, highlighting the company's effective operational strategies.

A significant focus was given to recent capital expenditure initiatives. The Board approved a capex of INR 236.5 crores to set up additional HFC capacity of 15,000 metric tonnes per annum of R32, which is projected to generate peak annual revenue between INR 600 crores to INR 825 crores. Furthermore, a second capex of INR 75 crores was allocated for debottlenecking MPP capacity, expected to generate an annual revenue of INR 140 crores to INR 160 crores. Both projects are to be funded through internal accruals.

The management expressed confidence in sustaining growth momentum, bolstered by a healthy order book across all business verticals. They emphasized robust partnerships with global innovators and a strategic push towards deepening relations with R&D efforts. For FY '26, the management projects EBITDA margins to improve, aiming for an annual margin between 28% and 30%, up from the previously guided 25%. Overall, Navin Fluorine is focused on maximizing value for shareholders while ensuring quality and efficiency in operations.

Here are the major questions asked during the earnings call along with detailed answers provided:

Question 1: "Given that the first half performance has been very strong, what are we looking at in terms of guidance for FY '26, FY '27 in terms of overall growth as well as margins and the capex for both these years?"

Answer: Thanks for your question, Rohit. For FY '26, we won't provide guidance for FY '27 yet. We've set a strong run rate this year aligned with market expectations. We are aiming for an EBITDA margin closer to 28%-30% for FY '26, surpassing our original guidance. Our first half EBITDA stands at 13.5%, indicating strong traction towards this goal.

Question 2: "If I do the working, you are presuming a pricing of R32? How do you look at the pricing scenario for CY '26?"

Answer: We maintain a constructive outlook on R32 demand. Although pricing predictions can be tricky, we believe demand significantly outweighs supply concerns. Our strategy is to manage capacity and maximize value, hence we expect the pricing environment to remain firm long term, with demand for R32 and blends continuing to rise.

Question 3: "What concrete non-physical milestones do you think define Navin Molecular's progress with CDMO partnerships?"

Answer: Our biggest intangible asset is our close collaboration with global innovators. We focus on timely, high-quality delivery and maintaining regulatory compliance. Our engineering capabilities in complex chemistry, along with strong IP protection, boost our standing as a CDMO partner.

Question 4: "Can you provide an outlook on world demand growth for R32 over the next 5 years?"

Answer: Current forecasts indicate a growth rate of about 5% CAGR for R32 demand globally, excluding China. With upcoming supply constraints and cuts expected in China by 2029, we don't foresee any imbalance in this growth equation. Demand will come from both India and export markets, aligning with sustainability trends.

Question 5: "What are the prospects for your CDMO business given the strong growth?"

Answer: We anticipate continued momentum with our CDMO business, focusing on achieving second-half growth better than the first half. Our order book is robust, and strong visibility continues into FY '27, supporting our trajectory towards reaching our aspirational targets.

Question 6: "What stage are you in with the European CDMO partnership?"

Answer: We are set to commence supplies from our cGMP plant in January 2026 following successful deliveries to a major EU customer. We anticipate a repeat order in calendar year 2026, which reflects our solid relationship and the potential for significant future growth.

Question 7: "What is the expected capacity utilization for the new R32 plant?"

Answer: We aim for balanced utilization through a mix of committed contracts and open positions. The exact utilization rate will depend on market conditions as we manage supply carefully to prevent oversaturation, ensuring sustained profitability and stability for our R32 operations.

Question 8: "Regarding margins, will they remain similar or optimal in FY '27?"

Answer: We'll revisit this as FY '27 approaches. Currently, we're focused on maximizing shareholder value, and we've been successful thus far, but it's too early to cement specific guidance for next year. Our margin strategies are in place to adapt to ongoing changes in the business environment.

These responses provide a comprehensive overview of the company's current outlook and future plans as discussed during the earnings call.