Navin Fluorine International Ltd makes fluoro-chemicals, a highly corrosive, poisonous and gaseous halogen element used in a wide variety of industrially important compounds. Navin Fluorine has one of the largest integrated fluoro-chemicals complexes in Surat (Gujarat) since 1967. Its other manufacturing facility is located in Dewas (Madhya Pradesh). The company focuses on three product groups—refrigeration gases, chemicals/bulk fluorides and specialty organo-fluorines.
Navin Fluorine has developed more than 40 products on a commercial scale. Its diversified portfolio of advanced fluorine derivatives has wide-ranging applications in pharmaceuticals, agro and petrochemicals. The company sells its refrigerants under the brand name Mafron, which, over the years, has become a generic name for refrigerant gases in India. Bulk fluoro-chemicals are supplied to aluminium smelters, steel, automotive, glass, sugar, agro and pharma industries.
In 2008, Navin Fluorine opened a state-of-the-art R&D centre which develops novel and cost-effective ways of synthesising fluorinated analogues of chemicals including halogenations, nitration and hydrogenation.
Apart from the manufacturing capability for refrigerants, Navin Fluorine manufactures hydrofluoric acid (hydrogen fluoride), aluminium fluoride, cryolite (brand name Mafrolite), ammonium bi-fluoride and potassium fluoride. The company also makes BF3 (boron tri-fluoride gas) and its various adducts, fluoro-benzene and many other organic and inorganic fluorides.
The company’s international clients include top global crop protection, pharmaceutical and chemical companies. Navin Fluorine exports its products to North America, Europe and Asia. The company has started a contract research division making it a full CRAMS (Contract Research and Manufacturing Service) provider. The research and early development activities are helping the company to build confidence amongst its partners. CRAMS helps the company to address client needs to develop processes and supplies of fluoro-specialties.
For the year ended March 2010, the company’s net profit was Rs74.36 crore, a jump of 64.18% from Rs45.29 crore in the last year. Operating margin in FY09-10 rose to 31% from 25% in FY08-09. RoCE improved from 27% to 40%, as a consequence of lower interest charge; and RoNW jumped from 21% to 29%.
Over the past five quarters, Navin Fluorine’s operating profit has grown by an average of 40% and its RoE was at 26%. Its market-cap to sales is 0.89 and market-cap to operating profit is 3.06, based on the June 2010 quarter results. Buy the stock at around current price.