Key highlights from Navin Fluorine Q2FY23 concall!!
CMP - ₹4138
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CMP - ₹4138
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The company faced some challenges in running it’s newly commissioned HFO plant in the previous month due to the unavailability of some key raw materials. The supplier of this raw material was in the process of setting up a new plant for this raw material and their project got
delayed due to which NFIL was not able to run their plant at the full capacity. The company is expecting a strong demand for their HFO product going forward and expects to receive the required raw materials in December which will help them ramp up the production to full capacity.
The HFO plant is managed by the subsidiary of NFIL which is known as Navin Fluorine Advanced Sciences Ltd(NFASL)
The company took a hit on their operating margin due to the inability to absorb the fixed cost for their HFO plant, under-utilization of the capacity of the HFO plant and the spot buying of the key raw material which was to be provided by their supplier which they had to buy at a
significantly higher cost than what they had agreed with their supplier
The company has done a corporate restructuring of their business. Earlier, the company had 4 business verticals which were Refrigerants, Bulk Fluorides, Specialty Fluorochemicals and CRAMS. Now, they have clubbed the Refrigerants, Bulk Fluorides and the newly added High
Performance Product(HPP) into HPP vertical which is headed by CEO Mr Partha Roychowdhury. The CRAMS vertical has been renamed as CDMO and is headed by CEO Mr Ravi Venkataramanan who has got around 30 years of experience in the pharma industry and has worked on both the pharma
side and CDMO side. The Specialty Fluorochemicals which is now known as Specialty Chemicals vertical is headed by CEO Mr Amrit Singh who has a good experience in agrochemicals
On the Specialty Chemicals side, the molecules which were developed by the company for pharma were mostly going towards ARV, thus ARV was an important segment historically for the company. The company taking into account the current slowdown in that area has managed to shift it’s
assets towards other product applications thus reducing it’s dependency on the ARV side
The debottlenecking process of the cGMP-3 plant in Dewas is under progress which will be completed by Q3FY23 leading to further capacity expansion. The company has received a purchase order of $16 million for a molecule which will be required by one of their pharma clients for
their late-stage clinical trials. The company is in discussions with it’s customer for specific delivery dates regarding this molecule and expects to begin supplying this molecule in the remaining 2 quarters of FY23. The company is in discussions with it’s board of directors for
a new cGMP-4 facility as it is expecting a strong demand on the CDMO side in Q4 and they expect to do $11 million worth of invoicing in Q3
2 new additional plants are scheduled to come online in Q3 FY23 at Dahej. One of them is an MPP whose production will begin in a phased manner while the other plant is dedicated for an agrochemical customer whose production is expected to commence in December. The total capex
done here is of Rs 320 crores out of which Rs 195 crore is for the MPP and the remaining Rs 125 crore is for the dedicated facility
The company had announced a capex of Rs 80 crores for R-32 plant in the last quarter. The company was using one of it’s R22 lines for making R32. This capex is expected to come online in Q1FY24. The full ramp-up of the capacity is expected to happen in CY24 and the expected
revenue potential of this plant is around Rs 200 crores at ramp-up
In Surat, most of the company’s plants are MPP due to which the company has a overall capacity utilization of 70-75%. It has one dedicated plant in Surat for an industrial product which has a capacity utilization of 70%. The company is in the process of debottlenecking in Surat
to get additional capacity. The company had announced debottlenecking in it’s HF plant at Surat a few quarters back and expects to get 15-20% additional capacity from the HF plant in Surat from the next quarter
The company is in discussions with it’s board of directors to set up a large facility at Dahej for HF of 3200 tons which will increase the overall HF capacity for the company once the project gets approved by the board and comes online
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