Stock Target: Chemical stock that can deliver 20% returns

SYNOPSIS: UBS raised Navin Fluorine’s target price to Rs. 7,000, citing strong H1 performance, improving CDMO visibility, upcoming capacity additions, and a strengthened balance sheet, noting the stock still undervalues its long-term growth potential.

Shares of a company involved in producing refrigeration gases, inorganic fluorides, specialty organofluorines and having one of the largest integrated fluorochemicals complexes in India are in focus on the stock exchanges on Monday, after global brokerage firm UBS reiterated its “buy” call with the highest price target on the Street, representing a potential upside of more than 21 percent.

At 02:04 p.m., shares of Navin Fluorine International Limited were trading in green at Rs. 5,766 on BSE, as compared to its previous closing price of Rs. 5,735.3, with a market cap of Rs. 29,544 crores.

The stock has delivered positive returns of around 71 percent in one year, but has fallen by over 2 percent in the last one month.

Brokerage Target & Outlook

Global brokerage firm UBS has reiterated its “buy” call on Navin Fluorine International Limited and increased its target price to Rs. 7,000 per share –  the highest target price on the Street. This implies a potential upside of over 21 percent from its current price levels.

UBS noted that the company delivered strong growth and margin performance in H1, sustained by strong refrigerant pricing and demand, steady progress in its CDMO operations, and a gradual improvement in specialty chemicals.

The brokerage expects this trend to continue, highlighting greater visibility in the CDMO business as Navin Fluorine prepares to commence operations at its cGMP-4 Phase 1 facility. UBS also pointed to the potential for repeat orders linked to a high-growth molecule in 2026.

In addition, the firm anticipates robust traction in high-performance products and specialty chemicals, aided by rising utilisation levels and upcoming capacity expansions.

UBS further stated that Navin Fluorine’s recent QIP has strengthened its balance sheet, positioning the company well for its ongoing capex cycle. Despite a 76 percent year-to-date rally in the stock, UBS believes the market has yet to fully price in the company’s long-term CDMO opportunity and margin expansion prospects.

While announcing its Q2 FY26 results on 30th October, the company disclosed that its Board has approved a capex of Rs. 236.5 crore to set up an additional HFC capacity of up to 15,000 MTPA (R32 equivalent) at its Surat facility. The Board also cleared a Rs. 75 crore capex for debottlenecking the multi-purpose plant at Dahej, a project that will be executed by its wholly owned subsidiary, Navin Fluorine Advanced Sciences Limited.

Both the new HFC capacity and the debottlenecking project are expected to be completed by Q3 FY27, enhancing production capabilities and supporting the company’s ongoing expansion plans.

Financials & More:

Navin Flourine reported a significant growth in revenue from operations, experiencing a year-on-year increase of around 46 percent, from Rs. 519 crores in Q2 FY25 to Rs. 758 crores in Q2 FY26.

Likewise, the company’s net profit increased during the same period from Rs. 59 crores to Rs. 148 crores, representing an impressive rise of around 151 percent YoY.

Navin Fluorine International Limited, which belongs to the Padmanabh Mafatlal Group, primarily focuses on fluorine chemistry – producing refrigeration gases, inorganic fluorides, specialty organofluorines and offers contract research and manufacturing services. Its manufacturing facilities are located at Surat (Gujarat) and Dewas (Madhya Pradesh).

Written by Shivani Singh

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