Navin Fluorine shares jump over 3% today 3,603 after the company signed 800 crore multi-year agreement for supply of key agro-chemical fluoro-intermediates. Naveen Fluorine International is one of the largest manufacturers of fluorochemicals in India. The stock has been a multi-bagger, rising over 650 percent over the past five years.
Ravi Singh, Head of Research and Vice President, ShareIndia, says the win of the deal will be a tailwind for Naveen Fluorine stock. “After this 800 crore deal in key agrochemical products, Naveen Fluorine is expected to give 10-15% returns in the near future,” he added.
“The deal will strengthen Naveen Fluorine’s product portfolio and customer relationship. It will also upgrade existing plants with investment value 125 crores. Can consider the buying area of the investor 3321 level for target price 4000,” said Manoj Dalmiya, founder and director, Praveen Equities Ltd.
The company on Wednesday announced that its wholly owned subsidiary Naveen Fluorine Advanced Sciences Ltd. has entered into a multi-year agreement with a major multinational company for the manufacture and supply of a leading agro-chemical fluoro-intermediate.
“NFASL has entered approx. Rupee. 800 crore agreement for manufacture and supply of key agro-chemical fluoro-intermediates over a period of 5 years. This project will strengthen our product offering as well as customer relationships, providing building blocks for future growth,” said Naveen Florin. 125 including an estimated investment of Rs 14 crore for expansion of the project. There will be an investment of Rs.Crore in the waste treatment plant.
The facility will be located in Dahej, Gujarat, and will be funded through a mix of internal sources and credit and supplies are expected to begin by the end of FY13, Naveen Florin said.
“The deal will strengthen Naveen Fluorine’s product portfolio and customer relationship. It will also upgrade existing plants with investment value 125 crores. Can consider the buying area of the investor 3321 level for target price 4000,” said Manoj Dalmiya, founder and director, Praveen Equities Ltd.
Naveen Fluorine shares fall sharply since hitting new highs 4,212 in October this year after reporting a decline in profit in the first September quarter. HDFC Securities in an October report said margins were negatively impacted on a year-on-year basis due to higher raw material cost, increased staffing cost, higher maintenance expenses and higher freight cost. However, the brokerage retained its additional rating on the add rating on Navin Fluorine shares on the back of earnings visibility, given the inclination in the sales mix towards longer-term contracts and higher-margin high-value business.
Earlier this month, Jefferies began coverage new fluorine With a buy recommendation, due to increased income and optionality from new product wins.
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