Navin Fluorine - Stock Price Factoring Beyond Option Value: ICICI Securities
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ICICI Securities Report
Navin Fluorine International Ltd. has been among the best performing specialty chemicals stocks, and rightly so, due to emerging high value businesses.
But, we believe the valuation at 42 times FY23 earnings per share / 7.8 times FY23 enterprise value/sales is factoring beyond option value from these businesses.
Option-based premium valuation is likely due to strong bounce back in contract research and manufacturing service business and emerging new businesses in high performance products and hexafluoro platform.
While CRAMS is shaping well, the past three-year compound annual growth rate was just 12%, we would wait to see more consistent performance on which the management seems quite confident.
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