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MAKINGMARKETS
FUNCTIONBETTE
R
YEARS
Apollo HospitalsEnterprise Ltd
CRISIL IERIndependentEquityResearch
Enhancing investment decisions
Detailed Report
Navin FluorineInternational Ltd
Q4FY12 Result Update
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CRISIL IERIndependentEquityResearch
Explanation of CRISIL Fundamental and Valuation (CFV) matrix
The CFV Matrix (CRISIL Fundamental and Valuation Matrix) addresses the two important analysis of an investment making process Analysis
of Fundamentals (addressed through Fundamental Grade) and Analysis of Returns (Valuation Grade) The fundamental grade is assigned on afive-point scale from grade 5 (indicating Excellent fundamentals) to grade 1 (Poor fundamentals) The valuation grade is assigned on a five-
point scale from grade 5 (indicating strong upside from the current market price (CMP)) to grade 1 (strong downside from the CMP).
CRISIL
Fundamental Grade Assessment
CRISIL
Valuation Grade Assessment
5/5 Excellent fundamentals 5/5 Strong upside (>25% from CMP)
4/5 Superior fundamentals 4/5 Upside (10-25% from CMP)
3/5 Good fundamentals 3/5 Align (+-10% from CMP)
2/5 Moderate fundamentals 2/5 Downside (negative 10-25% from CMP)
1/5 Poor fundamentals 1/5 Strong downside (
7/31/2019 CRISIL Research Ier Report Navin Fluorine 2011 Q4FY12
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MAKINGMARKETS
FUNCTION
BETTE
R
YEARSNavin Fluorine International LtdPositive surprise on revenues, earnings lower than expected
Fundamental Grade 3/5 (Good fundamentals)
Valuation Grade 3/5 (CMP is aligned)
Industry Chemicals
1
May 25, 2012
Fair Value Rs 396**
CMP Rs 396
For detailed initiating coverage report please visit: www.ier.co.in
CRISIL Independent Equity Research reports are also available on Bloomberg (CRI ) and Thomson Reuters.
Navin Fluorine International Ltds (Navins) Q4FY12 earnings were below CRISIL Researchs
estimates even though revenues outperformed, driven by higher-than-expected income from
the core business as well as income from certified emission reductions (CER). However,
adjusted PAT margin of 2.2% was below our estimates as an increase in raw material and
employee costs led to lower operating margins. Going forward, we expect fluorspar prices to
remain high on account of export restrictions from China (major producer and consumer of
fluorspar). However, given the strong demand for refrigerants, especially in the domestic
market, we believe that Navin will be able to maintain its EBITDA margin at ~10% as far as
the chemicals business is concerned. We have, accordingly, revised our FY13 estimates.
Further, we expect a significant decline in CER income on account of a decline in CER
prices. We maintain our fundamental grade of 3/5 on Navin.
Q4FY12 result analysis
Revenues declined 8% y-o-y to Rs 979 mn (lower by 7% q-o-q) as income from the
chemicals business as well as CER income declined 8% and 12%, respectively, y-o-y.
According to the management, realisations were lower in Q4 compared to average
realisations in 9MFY12, which led to lower sales volumes in the chemicals business.
EBITDA margin at 13.2% is significantly lower y-o-y as well as q-o-q (36.2% in Q4FY11
and 31.9% in Q3FY12) due to rise in raw material costs. While fluorspar prices declined
in the latter half of the year, advance purchases by Navin led to higher raw material
costs in Q4. Raw material costs as a percentage of sales was 47% compared to ~40%
in Q3FY12. Employee costs also grew by 37% y-o-y during Q4FY12 as the company
ramped up its employee strength in the specialty and CRAMS businesses.
During Q4, Navin has written back the provision for diminution in value of its investments
in Mafatlal Industries Ltd (MIL) and Mafatlal Denim Ltd (MDL), amounting to Rs 749 mn,
as net worth of both companies has turned positive. Adjusting for one-time write-back of
provision for diminution, adjusted PAT of Rs 35 mn is 91% lower y-o-y (-90% q-o-q).Adjusted PAT margin is 2.2% compared to 23.9% in Q4FY11 (21.1% q-o-q).
Valuation: Current market price is aligned**
We have rolled forward our valuation to FY14, and arrived at cum-dividend fair value of
Rs 396 per share and ex-dividend fair value of Rs 329 per share. Navin has announced the
final and a special dividend of Rs 6.5/share and Rs 60/share, respectively. Subject to
shareholders approval, the special and final dividends will be paid on June 21, 2012. As
CMP of Rs 396 is aligned with our cum-dividend fair value, the valuation grade is 3/5.
KEY FORECAST
(Rs mn) FY10 FY11 FY12# FY13E FY14EOperating income 4,318 4,315 7,246 5,967 5,880
EBITDA 1,464 1,213 2,505 1,167 652Adj Net income 824 712 1,425 758 408
Adj EPS-Rs 81.6 72.9 146.0 77.7 41.8
EPS growth (%) 44.6 (10.7) 100.1 (46.8) (46.3)
Dividend Yield (%) 4.1 4.5 18.9 6.3 1.9
RoCE (%) 45.8 30.8 48.0 16.2 6.8
RoE (%) 31.3 22.4 34.6 14.9 7.4
PE (x) 4.9 5.4 2.7 5.1 9.5
P/BV (x) 1.3 1.1 0.8 0.7 0.7
EV/EBITDA (x) 2.3 3.4 1.5 3.0 5.7
**Cum dividend fair value of Rs 396. Ex-dividend fair value is Rs 329
# based on abridged financials
NM: Not meaningful; CMP: Current market price
Source: Company, CRISIL Research estimates
CFV MATRIX
KEY STOCK STATISTICS
NIFTY/SENSEX 4921/16222
NSE/BSE ticker NAVINFLUOR/NAVIN
Face value (Rs per share) 10
Shares outstanding (mn) 9.8
Market cap (Rs mn)/(US$ mn) 3,865/69
Enterprise value (Rs mn)/(US$ mn) 4,874/87
52-week range (Rs)/(H/L) 440/269
Beta 1.1
Free float (%) 61%
Avg daily volumes (30-days) 83,544Avg daily value (30-days) (Rs mn) 34.5
SHAREHOLDING PATTERN
PERFORMANCE VIS--VIS MARKET
Returns
1-m 3-m 6-m 12-m
NAVIN 9% 16% 15% 43%
NIFTY -6% -9% 3% -9%
ANALYTICAL CONTACTMohit Modi (Director) [email protected]
Anant Damani [email protected]
Bhaskar Bukrediwala [email protected]
Client servicing desk
+91 22 3342 3561 [email protected]
1 2 3 4 5
1
2
3
4
5
Valuation Grade
FundamentalGrade
PoorFundamentals
ExcellentFundamentals
Strong
Downs
ide
Stron
g
Upsid
e
38.5% 38.5% 38.5% 38.7%
1.1% 4.0%5.3% 5.1%
2.5%3.7% 4.2% 4.2%
57.9% 53.9%52.0% 52.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jun-11 Sep-11 Dec-11 Mar-12Promoter FII DII Others
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2
Q4FY12 Result Summary (Standalone)
(Rs mn) Q4FY12 Q3FY12 Q4FY11 q-o-q (%) y-o-y (%) FY12 FY11 y-o-y (%)
Revenue from core business 979 1,051 1,063 -7% -8% 4,492 3,514 28%
Revenue from CER 567 544 645 4% -12% 2,519 783 222%
Other operating income 20 4 3 NM NM 27 11 160%Operating income 1,566 1,599 1,711 -2% -8% 7,039 4,307 63%
Raw material cost 738 636 512 16% 44% 2,468 1,716 44%
Raw material cost (% of net sales) 47.1% 39.8% 29.9% 733 bps 1716 bps 54.9% 48.8% 610 bps
Employee cost 138 93 100 48% 37% 409 298 37%
Other expenses 484 359 479 35% 1% 1,665 1,166 43%
EBITDA 207 511 620 -60% -67% 2,497 1,127 121%
EBITDA margin 13.2% 31.9% 36.2% -1875 bps -2303 bps 35.5% 26.2% 930 bps
Depreciation 48 47 38 3% 26% 177 135 31%
EBIT 158 464 582 -66% -73% 2,320 992 134%
Interest and finance charges 7 13 14 -45% -52% 35 36 -1%
Operating PBT 151 451 567 -66% -73% 2,284 956 139%
Other Income 35 47 40 -26% -13% 161 104 55%
Extraordinary income / (expense) 749 - - - 749 - n.m.PBT 935 498 607 88% 54% 3,194 1,060 201%
Tax 151 160 198 -6% -24% 882 343 157%
Reported PAT 784 338 409 132% 92% 2,312 716 223%
Adj PAT 35 338 409 -90% -91% 1,563 716 118%
Adj PAT margin 2.2% 21.1% 23.9% -1891 bps -2167 bps 22.2% 16.6% 557 bps
No of equity shares (mn) 9.8 9.8 9.8 0% 0% 9.8 9.8 0%
Adj EPS (Rs) 3.6 34.6 41.9 -90% -91% 160.2 73.4 118%
Source: Company, CRISIL Research
Q4FY12 Result Summary (Consolidated)
(Rs mn) FY12 FY11 y-o-y (%)
Revenue from core business 4,700 3,514 34%Revenue from CER 2,519 783 222%
Other operating income 27 11 160%
Operating income 7,247 4,307 68%
Raw material cost 2,553 1,716 49%
Raw material cost (% of net sales) 54.3% 48.8% 547 bps
Employee cost 490 298 64%
Other expenses 1,698 1,168 45%
EBITDA 2,505 1,125 123%
EBITDA margin 34.6% 26.1% 845 bps
Depreciation 188 138 36%
EBIT 2,317 987 135%
Interest and finance charges 36 36 -1%
Operating PBT 2,282 951 140%Other Income 8 106 -92%
Extraordinary income / (expense) 749 - NM
PBT 3,039 1,057 187%
Tax 886 344 158%
Reported PAT 2,153 713 202%
Share of profit / (loss) in associates 22 - NM
Minority interest 1 0 NM
Reported PAT after minority interest 2,174 713 205%
Adj PAT 1,425 713 100%
Adj PAT margin 19.7% 16.6% 310 bps
No of equity shares (mn) 9.8 9.8 0%
Adj EPS (Rs) 146.0 73.1 100%
Source: Company, CRISIL Research
The core chemicals business
grew by 34% in FY12, led by
strong growth in realisations
both in domestic and export
markets
Adjusting for non-recurring
expenses, the core business
posted EBITDA margin of ~9%
in FY12
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MAKINGMARKETS
FUNCTIONBETTE
R
YEARSNavin Fluorine International Ltd
3
Revenue and growth trend PAT and PAT margin
Source: Company, CRISIL Research Source: Company, CRISIL Research
Strong growth across all segments of core business CER prices on a decline
Source: Company, CRISIL Research Source: Industry, CRISIL Research
Share price movement Fair value movement since initiation**
-indexed to 100
Source: NSE, CRISIL Research Source: NSE, BSE, CRISIL Research
** Ex-dividend fair value of Rs 329/share
726 784 941 1,096 1,309 1,153 1,055 1,000
139 611
641 768
544 567
29.2%
11.5%
16.7%
35.9%
46.0% 45.7%
31.9%
13.2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
(%)(Rs mn)
Revenue-Core Business CER Income
EBITDA margin (RHS)
31 15255
100 409 602 633 338 352.6%
17.6%
7.1%
10.6%
23.9%
30.9%33.0%
21.1%
2.2%
0%
5%
10%
15%
20%
25%
30%
35%
0
100
200
300
400
500
600
700
Q4FY10
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
(Rs mn)
PAT PAT margin (RHS)
1,1621,121 1,030
1,604 1,968
671808 596
770 987
853 1,075 908 1,178 1,608
0%10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY08 FY09 FY10 FY11 FY12
(Rs mn)
Regrigerants Bulk Speciality/CRAMS
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Mar-09
May-09
Jul-09
Sep-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Nov-10
Jan-11
Mar-11
May-11
Aug-11
Oct-11
Dec-11
Feb-12
Apr-12
EUR/CER
0
20
40
60
80
100
120
140
160
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
May-11
Aug-11
Nov-11
Feb-12
May-12
Navin NIFTY
0
500
1,000
1,500
2,000
2,500
0
50
100
150
200250
300
350
400
450
500
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
May-12
('000)(Rs)
Total Traded Quantity(RHS) CRISIL Fair Value Navin
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4
MANAGEMENT MEETINGS KEY TAKEAWAYS
On current business environment
Raw material prices have corrected during Q4FY12. However, the management expects
long-term prices of fluorspar to remain high on account of restrictions on exports by the
Chinese government.
The demand environment for refrigerant gases is expected to remain strong, especially in
the domestic market, driven by growth in the air conditioner market. HCFC 22 is a cost-
effective product compared to its alternatives, so will remain in demand in developing
nations. Further, with uncertainty on the current CER framework, the global
manufacturing capacity of refrigerants will also reduce in the future, benefitting refrigerant
producers in other countries including India.
The specialty chemicals and CRAMS businesses will be key growth drivers going
forward. Navin plans to enhance their engagement with global and Indian pharma and
agrochemical companies. It may also add more capacity in the specialty chemicals
business during FY13.
On CER income
There is uncertainty on what the CER framework would be beyond 2013. It is difficult to
predict how it will shape up.
Costs incurred by Navin for incineration of harmful gases are not significant. Therefore,
compliance with emission regulations will not be expensive even in the absence of a
CER incentive.
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MAKINGMARKETS
FUNCTIONBETTE
R
YEARSNavin Fluorine International Ltd
5
EARNINGS ESTIMATES REVISED DOWNWARDS
FY13E FY14E
Particulars Unit Old New % change New
Core revenues (Rs mn) 4,404 5,183 17.7% 5,880
CER income (Rs mn) 1,102 784 -28.9% -
Total revenue (Rs mn) 5,506 5,967 8.4% 5880
EBITDA (Rs mn) 1,437 1,167 -18.8% 652
EBITDA margin % 26.1 19.6 -653 bps 11.1%
PAT (Rs mn) 1,032 758 -26.5% 408
PAT margin % 18.7 12.7 -603 bps 6.9
EPS Rs 105.7 77.7 -26.5% 41.8
Source: CRISIL Research estimate
Reasons for changes in estimates
Line item FY13 FY14
Revenues We expect the core chemicals business to continue its
growth momentum in FY13 led primarily by domestic
demand. However, we expect growth in the chemicals
business to be 10% compared to 33% in FY12 on
account of flat growth in export realisations and slower
realisation growth in the domestic market.
Our earlier estimate of CER income factored in CER
realisation of EUR 7/ CER and sales volume of 2.4 mn
CERs. Since the traded CER prices are quoting at ~EUR
3.5-4.0 per CER, we have factored in realisation of EUR
4.0 per CER for Navin. We have also assumed sales
volume of 2.8 mn CERs as guided by the management.
Introducing FY14 estimates.
We expect the core chemicals business to register revenue
growth of 13% over FY13. Our projections factor in realisation
growth of ~7% and volume growth of 6%. Both domestic and
export markets are expected to grow.
We have not assumed any CER income due to the
uncertainty on the current framework of incentivising the cut
in emissions of HFC 23
EBITDA margins The chemicals business reported EBITDA margin of ~9%
in FY12, adjusted for non-recurring expenses. We believe
the current margin is sustainable and expect the
chemicals business to post EBITDA margin of 9.3% in
FY13.
Expect EBITDA margin to expand to 11.1% due to higher
realisations compared to FY13 and rise in revenue
contribution of specialty chemicals and CRAMS businesses,
which are expected to have higher margins.
PAT margins Lower on account of lower operating profitability as we
have factored in lower CER income.
Lower on account of absence of CER income. However, the
core chemicals business PAT margin is expected to expand
to 6.6%, 80 bps higher compared to FY13.
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6
Valuation Grade: 3/5
We have used the SoTP method to value Navin. The core business operations are valued by
the price-to-earnings (P/E) method and the non-operating assets are valued on a case-to-
case basis. We have arrived at ex-dividend fair value of Rs 329 per share per share. Our cum-dividend fair value is Rs 396 per share. Based on the current market price (currently trading
cum-dividend) the assigned valuation grade is 3/5.
Valuation
Value per
share (Rs) Discount
Value per
share post
discount
(Rs) Rationale
Post tax CER income in
FY1347 25% 35 Expect Navin to sell 2.8 mn CERs at EUR 4.0 per CER
Investments in FD, FMP
and other liquid
instruments
80 25% 60
Includes investments in FDs, FMPs and liquid funds by Navin as of FY12. We
have lowered the 40% discount rate on cash applied earlier to 25% as we
believe that Navin is more likely to pay surplus funds as dividends. Further,
remaining cash worth Rs 32 per share has not been included in the fair value as
the same is expected to be utilised towards future capex plans and on-going
operations
Commercial real estate
property in Lower Parel55 55 Rental income from the property valued at 10% capitalisation rate
Commercial real estate
property in Nariman Point,
owned by Navins
subsidiary Sulakshana
Securities Ltd
42 42 Rental income from the property valued at 10% capitalisation rate
Preference shares in
Mafatlal Industries Ltd31 25% 23
Preference shares worth Rs 300 mn redeemed in FY12 and another Rs 300 mn
expected to be redeemed in FY13. We had earlier discounted the receivables
from this investment at 50%. However, due to an increased likelihood of
redemption in FY13, we have lowered the discount rate to 25%
Equity investment in
Mafatlal Denim Ltd16 50% 8
We remain conservative about the timing of cash flows to Navin, although MDL
has turned profitable
Value from non-core
assets263 223
Core business valuation 106 106 Based on P/E multiple of 4x the core business EPS of FY14
Fair value (ex-dividend) 369 329
Final and special dividend
for FY1267 67
Fair value (cum-
dividend)396
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MAKINGMARKETS
FUNCTIONBETTE
R
YEARSNavin Fluorine International Ltd
7
One-year forward P/E band One-year forward EV/EBITDA band
Source: NSE, CRISIL Research Source: NSE, CRISIL Research
P/E premium / discount to NIFTY P/E movement
Source: NSE, CRISIL Research Source: NSE, BSE, CRISIL Research
CRISIL IER reports released on Navin Fluorine International Ltd
Date Nature of report
Fundamental
grade Fair value
Valuation
grade
CMP
(on the date of report)
13-Sept-10 Initiating coverage* 2/5 Rs 300 3/5 Rs 292
25-Oct-10 Q2FY11 result update 2/5 Rs 300 3/5 Rs 296
16-Feb-11 Q3FY11 result update 2/5 Rs 265 3/5 Rs 261
23-May-11 Q4FY11 result update 2/5 Rs 304 3/5 Rs 279
01-Nov-11 Detailed report 3/5 Rs 329 2/5 Rs 391
05-Mar-12 Q3FY12 result update 3/5 Rs 329 3/5 Rs 354
24-May-12 Q4FY12 result update 3/5 Rs 396** 3/5 Rs 396
**Cum-dividend fair value is Rs 396. Ex-dividend fair value of Rs 329
0
100
200
300
400
500
600
700
800
900
Apr-
08
Ju
l-08
Oc
t-08
Jan-0
9
Apr-
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Apr-
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t-10
Jan-1
1
May-1
1
Aug-1
1
Nov-1
1
Fe
b-1
2
May-1
2
(Rs)
Navin 2x 3x 4x 5x 6x
0
2,000
4,000
6,000
8,000
10,000
12,000
Apr-
08
Ju
l-08
Oc
t-08
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9
Apr-
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0
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Ju
l-10
Oc
t-10
Jan-1
1
May-1
1
Aug-1
1
Nov-1
1
Fe
b-1
2
May-1
2
(Rs mn)
EV 1x 2x 3x 4x
-100%
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Apr-
08
Ju
l-08
Oc
t-08
Jan-0
9
Apr-
09
Ju
l-09
Oc
t-09
Jan-1
0
Apr-
10
Ju
l-10
Oc
t-10
Jan-1
1
May-11
Aug-1
1
Nov-1
1
Fe
b-1
2
May-12
Premium/Discount to NIFTY Median premium/discount to NIFTY
0
1
2
3
4
5
6
7
Apr-0
8
Ju
l-0
8
Oc
t-0
8
Jan-0
9
Apr-0
9
Ju
l-0
9
Oc
t-0
9
Jan-1
0
Apr-1
0
Ju
l-1
0
Oc
t-1
0
Jan-1
1
May-1
1
Aug-1
1
Nov-1
1
Fe
b-1
2
May-1
2
(Times)
1yr Fwd PE (x) Median PE
+1 std dev
-1 std dev
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CRISIL IERIndependentEquityResearch
8
Annexure: Financials
Source: CRISIL Research
Income statement Balance Sheet(Rs mn) FY10 FY11 FY12# FY13E FY14E (Rs mn) FY10 FY11 FY12# FY13E FY14E
Operating income 4,318 4,315 7,246 5,967 5,880 Liabilities
EBITDA 1,464 1,213 2,505 1,167 652 Equity share capital 101 98 98 98 98
EBITDA margin 33.9% 28.1% 34.6% 19.6% 11.1% Reserves 2,878 3,287 4,679 5,154 5,477
Depreciation 114 138 188 204 227 Minorities - 0 63 63 64
EBIT 1,351 1,074 2,317 963 425 Net worth 2,979 3,384 4,840 5,315 5,639
Interest 25 31 36 44 40 Convertible debt - - - - -
Operating PBT 1,326 1,043 2,281 920 386 Other debt 114 491 946 796 796
Other income (22) 13 8 180 191 Total debt 114 491 946 796 796
Exceptional inc/(exp) 1 0 749 - - Deferred tax liability (net) 210 191 286 286 286
PBT 1,305 1,056 3,039 1,100 576 Total liabilities 3,303 4,066 6,072 6,398 6,721
Tax provision 480 344 886 363 190 Assets
Minority interest - - (21) (21) (21) Net fixed assets 1,664 1,837 2,265 2,161 2,307
PAT (Reported) 825 712 2,174 758 408 Capital WIP 278 364 364 364 364
Less: Exceptionals 1 0 749 - - Total fixed assets 1,942 2,201 2,629 2,525 2,671
Adjusted PAT 824 712 1,425 758 408 Investments 8 478 1,590 1,612 1,634
Current assets
Ratios Inventory 472 551 886 819 934
FY10 FY11 FY12# FY13E FY14E Sundry debtors 390 578 665 776 886Growth Loans and advances 884 1,069 394 324 319
Operating income (%) 2.6 (0.1) 67.9 (17.7) (1.4) Cash & bank balance 808 177 1,068 1,200 1,026
EBITDA (%) 42.8 (17.2) 106.6 (53.4) (44.2) Marketable securities - - - - -
Adj PAT (%) 44.6 (13.6) 100.1 (46.8) (46.3) Total current assets 2,554 2,376 3,013 3,120 3,165
Adj EPS (%) 44.6 (10.7) 100.1 (46.8) (46.3) Total current liabilities 1,359 1,137 1,569 1,269 1,159
Net current assets 1,194 1,238 1,444 1,851 2,006
Profitability Intangibles/Misc. expenditure 158 149 410 410 410
EBITDA margin (%) 33.9 28.1 34.6 19.6 11.1 Total assets 3,303 4,066 6,072 6,398 6,721
Adj PAT Margin (%) 19.1 16.5 19.7 12.7 6.9
RoE (%) 31.3 22.4 34.6 14.9 7.4 Cash flow
RoCE (%) 45.8 30.8 48.0 16.2 6.8 (Rs mn) FY10 FY11 FY12# FY13E FY14E
RoIC (%) 34.1 27.5 45.6 29.9 17.4 Pre-tax profit 1,304 1,056 2,290 1,100 576
Total tax paid (441) (363) (791) (363) (190)
Valuations Depreciation 114 138 188 204 227
Price-earnings (x) 4.9 5.4 2.7 5.1 9.5 Working capital changes 288 (666) 425 (275) (330)Price-book (x) 1.3 1.1 0.8 0.7 0.7 Net cash from operations 1,264 166 2,112 666 283
EV/EBITDA (x) 2.3 3.4 1.5 3.0 5.7 Cash from investments
EV/Sales (x) 0.8 1.0 0.5 0.6 0.6 Capital expenditure (142) (398) (616) (100) (373)
Div idend payout ratio (%) 20.1 24.3 33.7 32.2 18.0 Investments and others 71 (469) (1,112) (22) (22)
Dividend yield (%) 4.1 4.5 18.9 6.3 1.9 Net cash from investments (71) (867) (1,728) (122) (395)
Cash from financing
B/S ratios Equity raised/(repaid) 0 (136) 0 - -
Inventory days 65 70 68 68 70 Debt raised/(repaid) (413) 377 455 (150) -
Creditors days 159 113 59 60 60 Dividend (incl. tax) (165) (173) (854) (284) (85)
Debtor days 53 56 52 55 55 Others (incl extraordinaries) 42 2 906 22 22
Working capital days 45 61 36 31 51 Net cash from financing (536) 71 507 (411) (63)
Gross asset turnover (x) 1.7 1.6 2.4 1.8 1.6 Change in cash position 657 (630) 891 132 (175)
Net asset turnover (x) 2.6 2.5 3.5 2.7 2.6 Closing cash 808 177 1,068 1,200 1,026
Sales /operating assets ( x) 2.2 2.1 3.0 2.3 2.3
Current ratio (x) 1.9 2.1 1.9 2.5 2.7 Quarterly financialsDebt-equity (x) 0.0 0.1 0.2 0.1 0.1 (Rs mn) Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12
Net debt/equity (x) (0.2) 0.1 (0.0) (0.1) (0.0) Operating income 1,711 1,949 1,920 1,599 1,566
Interest coverage 54.1 34.4 65.0 22.1 10.7 Change (q-o-q) 82% 14% -1% -17% -2%
EBITDA 620 896 878 511 207
Per share Change (q-o-q) 294% 45% -2% -42% -60%
FY10 FY11 FY12# FY13E FY14E EBITDA margin 36.2% 46.0% 45.7% 31.9% 13.2%
Adj EPS (Rs) 81.6 72.9 146.0 77.7 41.8 PAT 409 602 633 338 784
CEPS 92.9 87.1 165.2 98.6 65.0 Adj PAT 409 602 633 338 35
Book value 295.1 346.7 495.8 544.5 577.7 Change (q-o-q) 308% 47% 5% -47% -90%
Dividend (Rs) 16.4 17.7 75.0 25.0 7.5 Adj PAT margin 23.9% 30.9% 33.0% 21.1% 2.2%
Actual o/s shares (mn) 10.1 9.8 9.8 9.8 9.8 Adj EPS 41.9 61.7 64.9 34.6 3.6
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MAKINGMARKETS
FUNCTIONBETTE
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YEARS
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CRISIL IERIndependentEquityResearch
CRISIL Research Team
President
Mukesh Agarwal CRISIL Research +91 22 3342 3035 [email protected]
Analytical Contacts
Tarun Bhatia Senior Director, Capital Markets +91 22 3342 3226 [email protected]
Prasad Koparkar Senior Director, Industry & Customised Research +91 22 3342 3137 [email protected]
Binaifer Jehani Director, Customised Research +91 22 3342 4091 [email protected]
Manoj Mohta Director, Customised Research +91 22 3342 3554 [email protected]
Sudhir Nair Director, Customised Research +91 22 3342 3526 [email protected]
Mohit Modi Director, Equity Research +91 22 4254 2860 mohit.modi@crisil .com
Jiju Vidyadharan Director, Funds & Fixed Income Research +91 22 3342 8091 [email protected]
Ajay D'Souza Director, Industry Research +91 22 3342 3567 [email protected]
Ajay Srinivasan Director, Industry Research +91 22 3342 3530 [email protected]
Rahul Prithiani Director, Industry Research +91 22 3342 3574 [email protected]
Business Development
Siddharth Arora Director, Customised Research +91 22 3342 4133 siddharth.arora@crisi l.com
Vinaya Dongre Director, Industry & Customised Research +91 22 3342 8025 [email protected]
Sagar Sawarkar Associate Director, Equity Research +91 22 3342 8012 [email protected]
Deepak Mittal Associate Director, Funds & Fixed Income Research +91 22 3342 8031 deepak.mittal@cris il.com
Prosenjit Ghosh Associate Director, Industry & Customised Research +91 22 3342 8008 [email protected]
Business Development Equity Research
Ahmedabad / Mumbai
Vishal Shah Regional Manager, Business Development
Email : [email protected] I Phone : 9820598908
Bengaluru / Mumbai / Pune
Vivek Tandon Regional Manager, Business Development
Email : [email protected] I Phone : 9967714970
Chennai / Hyderabad
Urmil Shah Regional Manager, Business Development
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Delhi
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Email : [email protected] I Phone : 9833364422
Kolkata
Priyanka Murarka Regional Manager, Business Development
Email : [email protected] I Phone : 9903060685
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Our Capabilities
Making Markets Function Better
Economy and Industry Research
Largest team of economy and industry research analysts in India Coverage on 70 industries and 139 sub-sectors; provide growth forecasts, profitability analysis, emerging trends,
expected investments, industry structure and regulatory frameworks
90 per cent of Indias commercial banks use our industry research for credit decisions Special coverage on key growth sectors including real estate, infrastructure, logistics, and financial services Inputs to Indias leading corporates in market sizing, demand forecasting, and project feasibility
Published the first India-focused report on Ultra High Net-worth Individuals All opinions and forecasts reviewed by a highly qualified panel with over 200 years of cumulative experience Largest independent equity research house in India, focusing on small and mid-cap companies; coverage
exceeds 100 companies
Released company reports on all 1,401 companies listed and traded on the National Stock Exchange; a globalfirst for any stock exchange
First research house to release exchange-commissioned equity research reports in India
Funds and Fixed Income Research
Largest and most comprehensive database on Indias debt market, covering more than 14,000 securities Largest provider of fixed income valuations in India Value more than Rs.33 trillion (USD 650 billion) of Indian debt securities, comprising 85 per cent of outstanding
securities
Sole provider of fixed income and hybrid indices to mutual funds and insurance companies; we maintain 12standard indices and over 80 customised indices
Ranking of Indian mutual fund schemes covering 73 per cent of assets under management and Rs.5 trillion(USD100 billion) by value
Retained by Indias Employees Provident Fund Organisation, the worlds largest retirement scheme covering over 50 million individuals, for selecting fund managers and monitoring their performance
Equity and Company Research Largest independent equity research house in India, focusing on small and mid-cap companies; coverage
exceeds 100 companies
Released company reports on all 1,401 companies listed and traded on the National Stock Exchange; a globalfirst for any stock exchange
First research house to release exchange-commissioned equity research reports in India Assigned the first IPO grade in India
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