LIC Boosts Stake in Navin Fluorine by 0.24% Amidst Market Challenges

LIC Boosts Stake in Navin Fluorine by 0.24% Amidst Market Challenges

VoM News Desk | January 10, 2024 | 12:19 PM IST | Breaking News | Follow on Google News

LIC Boosts Stake in Navin Fluorine by 0.24% Amidst Market Challenges/Pixabay

LIC Boosts Stake in Navin Fluorine by 0.24% Amidst Market Challenges

Life Insurance Corporation of India (LIC) has increased its holding in Navin Fluorine International, a major Indian manufacturer specializing in fluorochemicals, by approximately 0.24% through open market transactions.

As per Tuesday’s regulatory filing, LIC purchased 1.21 lakh shares of Navin Fluorine International on January 8, averaging ₹3,630.39 per share. This move elevated LIC’s overall ownership in the company to 5.04%.

Navin Fluorine International specializes in fluorine chemistry, manufacturing refrigeration gases, chemicals, inorganic bulk fluorides, and specialty organofluorines. Additionally, it provides contract research and manufacturing services.

Despite facing challenges in recent months due to reduced demand and increased Chinese exports, Navin Fluorine International’s stock witnessed a significant decline from ₹4,668 to the current ₹3,504 per share in the last nine months, marking a 25% drop. However, the stock maintains a remarkable 415% gain over the past five years and an impressive 6265% increase over the last decade.

In an analysis by Jefferies, the brokerage foresees a slowdown in the company’s capital expenditure until new management establishes its priorities. It notes heightened leadership turnover, including the recent departure of the Head of Sustainability.

Jefferies anticipates challenges persisting in the chemical demand scenario in the first half of CY24. Furthermore, the brokerage expects delays in delivery schedules and foresees a normalization in demand by the end of FY25E.

The brokerage, while projecting a more favorable outlook for the Contract Development and Manufacturing Organization (CDMO), expects a boost in growth from product deferrals to CY2024 and a significant contract win from Fermion.

Despite the company’s premium valuations compared to peers like PI Industries and SRF, Jefferies maintains a ‘hold’ rating for Navin Fluorine International with a target price of ₹3,425 per share. It adjusted the FY24/25E EPS downward attributing to slower-than-anticipated recovery in chemicals demand and a year-on-year decline in CDMO in FY24E. The brokerage projects EBITDA growth of 39%/28% in FY25/26E.

VoM News Desk

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