Why navin fluorine share is falling?

In a surprising turn of events, Navin Fluorine International witnessed a sharp decline of over 13 percent in its share price on Friday, September 29. This came in the wake of the resignation of the company’s Managing Director, Radhesh R. Welling, citing personal reasons. The resignation is slated to take effect on December 15, 2023.

To ensure a smooth transition, the executive chairman, Vishad Mafatlal, will step in as the interim Managing Director until a replacement is appointed. The company expressed its gratitude for Welling’s contributions during his tenure and extended best wishes for his future endeavors.

This departure follows another significant resignation last month when Ravi Venkataramanan, CEO of CDMO Business at Navin Fluorine, also stepped down. The board of directors, in an effort to fortify the company, approved the appointment of Sudhir R Deo as an additional director from September 28.

Despite these recent developments, brokerage house Morgan Stanley remains optimistic about Navin Fluorine, maintaining an overweight rating with a target price of Rs 4,951 per share. However, the market responded with shares trading at Rs 3,789.55 apiece on the BSE, marking a 13 percent decrease.

In fact, the early trade on Friday saw the stock plummet by 14.5 percent to reach a 52-week low of Rs 3,726.65, underlining the significance of Welling’s resignation.

Navin Fluorine International Limited, the largest integrated fluorochemicals producer, currently trades at Rs 3,775 a share. This represents a substantial decline from the previous close price, and the company now boasts a market capitalization of Rs 18,624 crore.

Despite the recent turbulence, Navin Fluorine’s financials present a mixed picture. The company’s revenue has seen a notable 24 percent yearly increase, from Rs 397 crore in Q1FY23 to Rs 491 crore in Q1FY24. On the other hand, net profit has experienced a 17.5 percent decline, from Rs 74 crore to Rs 61 crore during the same period.

Looking at the company’s return on equity and return on capital employed, there’s a positive trend. Return on equity increased from 14.26 percent in FY22 to 17.17 percent in FY23. Similarly, return on capital employed rose from 17.29 percent to 17.40 percent during the same period.

In terms of margins, Navin Fluorine remains robust. With a net profit margin of 18.06 percent and an operating margin of 25.19 percent, the company displays financial stability.

Finally, a glance at the shareholding pattern reveals that the company’s promoters hold 28.81 percent, while foreign institutional investors have an 18.85 percent stake, and domestic institutional investors hold a 25.97 percent stake.

Navin Fluorine International Ltd, known for manufacturing refrigeration gases, inorganic fluorides, and specialized organofluorines, also provides contract research and development services.

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