Earnings Outlook:Navin Fluorine net profit seen up 37% YoY, dn 2% QoQ

22 Jul 2022

Navin Fluorine International Ltd‘s net profit in the June quarter will likely have risen on the back of price increases, operating margin improvement and the low base of year ago period.

Sequentially, however, the net profit is seen dipping slightly due to elevated input costs.

In Apr-Jun, the company’s net profit will likely have been 774 mln rupees as per an average of estimates of four brokerage firms. This would represent a 37% rise on the year and a 2% decline sequentially.

The topline of Navin Fluorine is seen at 4.4 bln rupees, up 42% on the year and up 12% on the quarter.

The company will declare its results for the June quarter on Saturday.

Analysts expect the company to have taken significant price hikes during the quarter which would reflect in a higher topline growth.

According to brokerage Kotak Institutional Equities, the specialty chemicals unit of the company will drive its overall revenue growth but there was a risk of disappointment in the revenue in CRAMS business.

Increased prices of refrigerant gases will likely have aided Navin Fluorine’s topline growth, said brokerage Axis Securities.

Brokerage ICICI Securities expects revenue from inorganic fluoride and refrigerants would have grown strongly on price increases taken during the June quarter.

Analysts expect Navin Fluorine’s operating profit growth may have been reined in by higher input costs. But a likely rise in contribution of value added products would boost the operating profit according to Axis Securities.

The key factors to monitor post earnings announcement by Navin Fluorine would be the revenue growth in CRAMS and specialty chemicals segments and their gross margins, according to brokerage ICICI Direct.