Navin Fluorine Share Price Falls As Kotak Retains Call, Sees 36% Downside
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Steady guidance on pharma CDMO and advanced materials growth was tempered by near-term R-32 market oversupply and a potential capex escalation tied to Chemours' expansion plans.
Shares of Navin Fluorine International were trading near the day's low on Friday after Kotak Institutional Equities retained its 'Sell' rating on the specialty chemicals company and kept its target price at ₹5,250.
The target implies a downside of more than 36% from the stock's previous close of ₹8,212.50 and is among the lowest on the street. Navin Fluorine shares fell as much as 1.4% to ₹8,140.50 during Friday's trade, before recovering some of the losses.
The stock has nevertheless delivered strong returns this year, gaining nearly 39% so far in 2026 and around 65% over the past 12 months.
Why Is Kotak Bearish On Navin Fluorine?
Kotak's view comes even as Navin Fluorine's management retained its guidance for 20%-25% revenue compound annual growth rate (CAGR) between FY25 and FY30 at its analyst meeting.
The company continues to be confident about its pharma contract development and manufacturing organisation (CDMO) business and expects advanced materials to become a much larger contributor over the longer term. Navin Fluorine expects the advanced materials business to scale up to around ₹1,400 crore in revenue by FY35.
Management sees the segment as an area where it can direct a greater share of future capital, helped by its niche positioning and higher margin profile. However, the business also has relatively lower asset turns compared with some of the company's existing operations. Near-term oversupply concerns in India's R32 market add another challenge for the segment.
The expansion plans are also likely to keep capital expenditure elevated. Navin Fluorine expects to spend around ₹700 crore on capex in the current financial year, followed by ₹700 crore-₹1,000 crore annually in FY28 and FY29.
That level of spending will be important as the company works to expand its advanced materials and CDMO businesses, particularly given the different capital requirements and returns across its operations.
The potential for a larger-scale expansion by Chemours is another factor in Kotak's assessment.
If Chemours proceeds with the expansion, Navin Fluorine could face significant additional capital expenditure. Management would then need to decide on the most appropriate financing structure for the project.
The expansion is expected to make a meaningful contribution to Navin Fluorine's revenue from FY32 onwards.
For now, the stock's sharp gains over the past year have to be weighed against the company's sizeable expansion plans, rising capex requirements and the execution involved in scaling up advanced materials and pharma CDMO.
Kotak Institutional Equities has therefore retained its 'Sell' rating on Navin Fluorine with a target price of ₹5,250.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
