Navin Fluorine International Ltd (NAVINFLUOR) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to the Navin Fluorine International Limited conference call hosted by Cygnus Partners. As a reminder, all participant
Moderator: will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Today on the call, we have with us Mr. Vishad Mafatlal, Chairman, Mr. Nitin Kulkarni, Managing Director and Mr. Anish Ganatra, Chief Financial Officer. This call will contain forward-looking statement about the company, which are completely based on the beliefs, opinions, and expectation of the of today's call. Actual results may differ materially. This statement are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. A detailed Safe Harbor statement is given on the page number two of the investor presentation of the company, which is uploaded on Stock Exchange and on the company's website with that. With this, I I know hand over conference over to Mr. Vishad Mafatlal for his opening remarks. Thank you and over to you, sir.
Vishad Mafatlal (Navin Fluorine International Ltd): and Q2 and H1 FY '27 earnings conference call. Joining me today are Managing Director Mr. Nitin Kulkarni, our Chief Financial Officer Mr. Anish Ganatra, and Miss Payal Dave from Signis Partners, an investor relations advisor. Before we proceed, I would like to take this opportunity to thank MUFG Intime team for supporting us in managing our investor relation activities during the last 5 years. We appreciate their contribution and assistance extended to us during this period. We have appointed Signis Partners as our investor relations consultant. We look forward to working with them as we continue to strengthen our engagement with the investor community. Coming to our performance, in the first half of FY '27, our PAT crossed 500 crores with an EPS of Rs. 100. This result reflects our continued focus on strengthening our businesses, building capabilities for the future, and advancing our strategic priorities through disciplined execution. As we navigate the evolving business environment, our priority remains to strengthen our business fundamentals and deliver sustainable growth across all verticals. At the same time, the safety, health, and well-being of our employees remain paramount, and we continue to uphold high standards of safety and operational excellence across our facilities. I am also pleased to share that the board has declared an interim dividend of Rs. 8 per equity share with a face value of Rs. 2 per share. In our HPP business, we continue to strengthen long-term customer relationships and commercial partnerships. In this context, I would like to highlight an important development announced recently. The tenure of our existing HFO supply contract with Solstice Advanced Materials has been extended by 4 years until December 2032 and will have an additional revenue potential of approximately US$180 million. I thank the management at Solstice for their continued trust in our capabilities and look forward to deepening our relationships with them. We are also making steady progress in developing advanced materials as a potential growth platform over the longer term. Focusing on specialized applications across areas such as data centers, electronics, semiconductors, and defense, leveraging our expertise in fluorination chemistry and R&D capabilities. We are confident this business will create additional growth opportunities for us. Let me now provide a brief update on our ongoing CAPEX programs. During the quarter, we commissioned the debottlenecking of our MPP capacity at Dahej. Our HFC capacity expansion is progressing as planned and remains on track for commissioning shortly. The Chemours project, which will enable us to participate in the emerging advanced cooling market, is also progressing towards commissioning in Q3 FY '27. Our investment in advanced materials adoption capacity is progressing as per schedule and is expected to commission by Q2 FY '28. In our CDMO business, phase 2 of the CGMP4 facility involving a CapEx of approximately 125 crores is progressing as planned and is expected to become operational by the end of Q4 FY '27. The TDAF project to develop an indigenous specialty material
Vishad Mafatlal (Navin Fluorine International Ltd): DRDO is progressing well as per schedule. While we deliver sustainable results and continue to invest in growth projects, the leadership and I are actively looking at meaningful investments in cutting-edge technologies that drive value for all our customers and ourselves. This includes enhancing the integration of digital technologies across our businesses, leveraging AI to strengthen our research capabilities, and optimize our processes. We are also investing in renewable energy across plants, which will meet more than 60% of our energy requirements through renewable resources. As we progress to the next phase of growth, we recognize the importance of continuously strengthening our organizational capabilities and investing in our people. We remain committed to developing our existing talent, enhancing critical skill sets, and building the capabilities required to support our evolving business needs and long-term growth ambitions. I would like to also thank our customers, employees, partners, and all stakeholders for their continued trust and support, and we look forward to building on this foundation in the years ahead. With that, I wish you and your families a very happy Diwali and a prosperous new year in advance. I will now hand over it to Nitin to take through our business and operating performance.
Nitin Kulkarni (Navin Fluorine International Ltd): Thank you, Vishad Bhai, and good evening, everyone. And thank you for attending the call today. We have delivered strong set of results in what is otherwise a very volatile geopolitical environment. In this regard, I would like to recognize the efforts of our leadership and their teams for their commitment, agility, and effectiveness in navigating these challenging times. All our business verticals witnessed a strong performance during the quarter, supported by healthy growth momentum. In our HPP business, we continue to deliver healthy revenue growth during the quarter, supported by higher volumes and improved realization. The pricing environment for HFC remains firm, with realization improved on a sequential basis. We are also witnessing encouraging customer interest in our upcoming capacities, providing good visibility for the business going forward. Our new AHF facility has witnessed an improvement in utilization, contributing to our growth momentum, and R32 CapEx is progressing as planned and remains on track for commissioning shortly. An extension of contract from Solstice Advanced Materials provides potential visibility beyond FY '28, and would like to extend my appreciation to the partners and teams involved. With our established customer relationships, growing portfolio of products, and expanding geographical footprint, we are well positioned to secure the opportunities in this business vertical. In the specialty chemical business, we continue to see healthy growth momentum, supported by strong order visibility for the second half of FY '27 and beyond. Our product pipeline continues to expand across both existing and new molecules, strengthening our portfolio of differentiated chemistries so and supporting our growth prospects. During the quarter, we commissioned the debottlenecking of our MPP capacity at Dahej in September 2026, further enhancing our production capabilities. Moving on to CDMO business, we continue to see strong momentum with our FY '27 target well within reach, supported by encouraging business developments and healthy product pipeline. I'm pleased to mention few of our existing molecules have been have seen positive developments in their end use with favorable results of the trials. Our engagement with leading European CDMO major continues to deepen, driven by increasing demand for an existing molecule and expanding role in the customer's supply chain. From a strategic perspective in this vertical, we continue to focus on building a balanced portfolio of late-stage and commercial molecules, complimented by early-stage programs. We are also expanding our presence across promising therapeutic areas, including oncology, cardiovascular, neurology, and animal health through engagements with global innovators. With this, I hand over the call to Anish for sharing the financial highlights.
Anish Ganatra (Navin Fluorine International Ltd): Thank you, Nitin. Good evening everyone and a warm welcome to the earnings conference call. Moving on to the financial performance for Q2 and first half FY '27, let me begin with the key highlights for the quarter. On a consolidated basis, operating revenue for the quarter stood at 1,191 crore, registering a year-on-year growth of 57%. Operating EBITDA grew by 66% year-on-year to 407 crore with margins expanding to 34.2%. Operating PBT increased by 87% to 336 crore while profit after tax rose by 81% to 269 crore, reflecting the strong growth in both revenue and profitability. Turning to the half-year performance, operating revenue for first half FY '27 increased by 51% to 2,236 crore, supported by broad-based momentum across HPP, specialty chemicals and CDMO businesses. Operating EBITDA grew by 69% to 765 crore, with margins expanding by 367 basis points to 34.2%. Operating PBT grew by 93% year-on-year to 619 crore compared with 320 crore in first half FY '26. Profit after tax also increased to 513 crore, a growth of 93% year-over-year. Our EPS stood at 100, and our net operating working capital days stood at 72 days, which is within our financial framework. With that, we can now open the floor for questions and answers.
Moderator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sanjesh Jain with ICICI Securities. Please go ahead.
Sanjesh Jain (ICICI Securities): Yeah, good evening. Thanks for taking my questions. My first question is on the revenue bridge. All the three segments sequentially has grown impressively. Can you help us understand what has led to this sequential growth? Because prices in ref gas has largely been stable in the HPP, and specialty I thought we were except Corteva most of the plants were running full. And and in CDMO, I think there is more offtake in the European Union. How much more can we do there? Can you help us understand all the three segments, what is driving the growth and from here on what growth driver from the Q2 base?
Anish Ganatra (Navin Fluorine International Ltd): All right. Thanks, Sanjesh. Good evening to you. I mean, sequentially,
Sanjesh Jain (ICICI Securities): Good evening, sir.
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