Buy Midcap Chemicals Stock, Likely To Give Robust Return Up To 45%: HDFC Securities

Leading brokerage firm HDFC Securities has come up with a Buy recommendation on Navin Fluorine International Ltd. (NFIL) for a target price of Rs 5,368 apiece. Given the target price set by the brokerage firm, if you buy the stock at the current market price, it is likely to fetch a strong return of up to 45%.

The brokerage views on NFIL are positive as it believes the company is well-positioned across three business segments, HPP, speciality chemicals and CDMO, to capture the growth opportunities.

NHIL is a midcap chemicals sector company, having a market cap of Rs 18,430.85 Crore.

Growth momentum to continue

The brokerage in the report stated, Navin Fluorine International Ltd (NFIL) announced that Mr Radhesh Welling has resigned as the managing director (MD) and director on the board of the company for personal reasons. Mr. Welling will be relieved from the services of the company effective from the close of business hours on December 15, 2023. He shall continue to serve the company to facilitate a smooth transition. The board is looking for an external candidate who has the ability to handle large projects and has the requisite execution skills and technical expertise. Meanwhile, executive chairman Mr Vishal Mafatlal will be heading the company's operations. The board has approved the appointment of Mr Sudhir Deo as a non-executive non-independent director of the company to further strengthen the board. Mr Deo has 44 years of experience and has retired as the MD of NOCIL. "We expect NFIL's PAT to grow at a 30% CAGR over FY23-26E, led by a 33% CAGR in EBITDA," the brokerage said.

Buy The stock With Target Price of Rs 5,368 apiece

Moreover, the brokerage said, "We retain our BUY rating on Navin Fluorine, with a target price of INR 5,368 (WACC 11%, terminal growth 5.5%) on the back of (1) earning visibility given long-term contracts in speciality chemicals and HPP segments; (2) a tilt in sales mix towards high margin high-value business; and (3) capacity expansion-led growth."

Stock Outlook

On Friday, the stock of NHIL currently trading at Rs 3,716 apiece, up 0.55% from its previous close of Rs 3,695.60 apiece. At the time of writing, the stock touched day's high of Rs 3,48.95 and day's low of Rs 3,699.95 on the BSE.

The stock has fallen 1.29% in 1 week, 20.70% in 1 month and 12.69% in 6 months, respectively. It has fallen 18.98% in 1 year. It has given 79.65% positive return in 3 years and 479.68% positive return in 5 years.

Its 52-week high is Rs 4,065.15 apiece and 52-week low is Rs 3,326.05 apiece on the BSE.

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.