Navin Fluorine hits 52-week low on resignation of Managing Director Radhesh Ratnakar Welling

Navin Fluorine share price: Shares of Navin Fluorine slipped as much as 14.5 per cent to hit a 52-week low of Rs 3,729 apiece on the BSE on Friday, September 29, a day after the company informed that its Managing Director Radhesh Ratnakar Welling has resigned from the post. The stock eventually ended at Rs 3,766.05, down 13.66 per cent on the BSE.

In its regulatory filing, the company said, "Mr. Radhesh R. Welling has tendered his resignation as the Managing Director and a Director on the Board of the Company for personal reasons. His resignation was accepted by the Board of Directors at its Meeting today.

"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 Company will induct a senior professional to head the organization as Managing Director in due course of time. Mr. Vishad P. Mafatlal, Executive Chairman, shall steer the operations of the Company and will be ably assisted by the leadership team," the filing added.

About Navin Fluorine 

The company is the leading manufacturer of speciality fluorochemicals. It belongs to the Padmanabh Mafatlal Group, one of India’s oldest industrial houses. "Established in 1967, NFIL operates one of the largest integrated fluorochemical complexes in India, with manufacturing locations at Surat and Dahej in Western India and Dewas in Central India. Our R&D centre named Navin Research Innovation Center (NRIC) is located in Surat, India," says the company's website.

In the past 3 months, the stock has declined around 14 per cent, Trendlyne data show. 

NFIL has four main strategic business units:

• Refrigeration Gases
• Inorganic Fluorides
• Speciality Fluorides
• Contract Development and Manufacturing Organisation (CDMO)

Analysts' views post-Q1 nos 

Centrum Broking, in its results review report released in August, said that the company's management remained optimistic on all three business segments, citing that HFO volumes will be recouped in Q2/ Q3. "Ramp-up in newly commissioned projects and upcoming ones is expected to drive revenue growth in FY24E/ FY25E. Based on the current business environment and management outlook, we have lowered our FY24E earnings by 8 per cent while upping FY25E earnings by 2 per cent. Lowering our P/E multiple to 40x, we maintain a buy rating with a lowered TP of Rs 5,267 (earlier Rs 5,768)," the report added.

JM Financial, too, had maintained 'BUY' on the stock with a target price of Rs 5,665 per share. The company currently has robust order inflow in the CDMO business, and the strong outlook remains intact. "The 3-year contract signed with Fermion will commence in CY25, with revenue kicking in from FY26. The company has received approval for one molecule that will be supplied to Fermion, and a qualification batch for the second molecule is expected to be submitted in 3QFY24," the brokerage said in a report dated August 1.

Some of these molecules will also be supplied from the new cGMP4 plant. Of the three molecules to be eventually supplied to Fermion, one is a commercial molecule, while the other two are late-stage molecules with no exclusivity or take-or-pay agreements, the report added.

Investor sentiment takes a hit

However, the Street looks disappointed with the resignation of the MD. Hence, the stock may see some de-rating.

Navin Flourine's performance under MD Radhesh Ratnakar Welling

Radhesh Ratnakar Welling took charge of the company on December 11, 2018. The outgoing MD of the company has over 26 years of work experience, of which 11 are in US-based MNCs. Moreover, between 2013 and 2015, too, Welling was with the company and held the post of President, Marketing, and Corporate Strategy. From 2015 to 2018, Welling served as the CEO and Executive Director of Laxmi Organic Industries.

As regards the financials, Navin Fluorine registered record revenue and net profit during FY23. The company's revenue increased from Rs 996 crore in FY19 to Rs 2,077 crore in FY23, and its net profit increased from Rs 149 crore in FY19 to Rs 375 crore in FY23.

Navin Fluorine's share performance 

The company's market capitalisation has increased from Rs 3,500 in 2018 to Rs 24,500 crore, and the stock's price has surged seven times: from Rs 700 (in December 2018) to Rs 4,950 (in May 2023).

With inputs from Zee Business Research and Kushal Gupta