Navin Fluorine shares surge 8% after Q1 profit more than doubles. Should you buy, sell or hold?

Shares of Navin Fluorine International rose 7.7% to Rs 8,195 in Thursday's trading session after the specialty chemicals major reported a strong Q1 performance, with consolidated profit more than doubling and revenue posting robust year-on-year (YoY) growth.

The company reported a consolidated net profit of Rs 243 crore for the June 2026 quarter, up 108% from Rs 117 crore in the corresponding quarter last year. Revenue from operations rose 44% YoY to Rs 1,045 crore, compared with Rs 725 crore in Q1FY26.

Following the strong quarterly performance, brokerage firm Elara Securities maintained its 'Buy' rating on the stock, with a target price of Rs 9,158, implying a potential upside of nearly 20% from current levels.

Strong Q1 performance beats estimates

According to Elara Securities, Navin Fluorine delivered a better-than-expected Q1FY27, with revenue, EBITDA and adjusted PAT of Rs 1,050 crore, Rs 360 crore and Rs 240 crore, respectively, beating estimates by 10%, 4% and 7%.

Revenue rose 44% YoY and 11% sequentially, while EBITDA surged 73% from a year ago and 11% quarter-on-quarter (QoQ). EBITDA margin remained robust at 34.2%, expanding 566 basis points year-on-year despite raw material cost inflation and delayed pass-through benefits.

Elara said Navin Fluorine continues to outperform peers, supported by favourable refrigerant pricing and strong demand in the contract development and manufacturing organisation (CDMO) business.

High Performance Products segment gains traction

Navin Fluorine's High Performance Products (HPP) segment reported 33% YoY revenue growth to Rs 540 crore, driven by higher volumes and better realisations. The Ammonium Hydrofluoride (AHF) plant continues to ramp up, while the additional 15,000 tonnes per annum R32 refrigerant capacity is expected to be commissioned in Q3FY27, with a peak annual revenue potential of Rs 600-830 crore.

The company has also secured select R32 supply contracts and is in advanced discussions for additional agreements, targeting five-year contracts covering 35-45% of the new capacity.

Specialty chemicals pipeline strengthens growth outlook

Revenue from the Specialty Chemicals segment rose 48% YoY to Rs 325 crore, driven by existing products and new molecule launches. Management has visibility on four to five agrochemical campaign orders in FY27, including three patented molecules expected to face lower pricing pressure than generic products.

The Dahej multi-purpose plant debottlenecking project remains on track for Q3FY27, with peak revenue potential of Rs 140-160 crore. Meanwhile, the Chemours liquid-cooling project is now expected to be completed by the end of Q2FY27.

CDMO business emerges as a key growth driver

CDMO revenue surged 82% YoY to Rs 180 crore, supported by a strong order pipeline. Management reiterated its FY27 revenue target of $100 million and has approved a Rs 125 crore Phase-II cGMP4 expansion, scheduled for completion in Q4FY27, to meet rising demand from its European partner.

Elara said the combined Rs 288 crore cGMP4 investment could generate around 3x asset turnover by FY29. The company is currently working on 30-40 programmes, including around 10 late-stage molecules, with three to four FDA readouts expected over the next 8-12 months.

Advanced Materials offers long-term growth opportunity

Navin Fluorine has approved a Rs 90 crore investment in an Advanced Materials facility in Surat, targeted for completion by Q2FY28. The plant will support commercial qualification of products for sectors including data centres, electronics, semiconductors and defence.

Around four to five products have already secured lab-scale approval from a pipeline of nearly a dozen products. Management believes this high-margin business, along with the Chemours project and DRDO partnership, could become a meaningful long-term growth driver.

Elara retains 'Buy'

Elara Securities has maintained its 'Buy' rating and Rs 9,158 target price, citing multi-year growth opportunities across CDMO, R32 refrigerants and Advanced Materials.

The brokerage expects 20% EBITDA CAGR between FY26 and FY32 and continues to monitor raw material costs, refrigerant pricing, project execution and CDMO growth.

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