The Q2FY25 result is extremely weak. The company promised sales CAGR of 50% over FY24-26 until Q4FY24 (mentioned in the result PPT). Interestingly, in their Q1FY25 PPT, they didnt mention any guidance. Now with a result disaster in Q2FY25, it shows what the management is upto.

Hotels as such is a cyclical business and capital intensive. One of the reasons, many like ITC are moving into a FOCO model which is comparatively asset lite. BT will immediately offload its entire stake bringing down the price, upon listing. The ones with a long term view and conviction on brands like ITC, Fortune, Welcome, Oberoi, Trent, and Leela can use this opportunity to add more.

Yes but one thing order book only stands at 450 cr at the moment. Not enough to justify any more capex as of now. At current 7500 mva capacity 720 cr of topline is expected. So at any given time company should have order book of 700 plus cr.

So if management is thinking about more capex then they might be in advanced stages of some big orders.

Every thing seems solid except 2 issues for me
1: Low order book
2: Over concentration in renewables

disclamer : Invested

Some interesting questions and management answers providing insights from the Navin Fluorine International Limited (NFIL) Q2 & H1 FY25 Earnings Call:

Specialty Chemicals – Improved Visibility

• Vive Rajani from Morgan Stanley asked what gave management confidence in the improved visibility for the second half of the year for the specialty chemicals business, given past deferrals.
• Nitin Kulkarni, MD, NFIL responded that they had entered into supply agreements with customers for many of their specialty molecules for both Q3 and Q4 of FY25 and the calendar year 2025. These agreements were based on the company’s existing capacity and were firm orders, not assumptions.
• Anish Ganatra, CFO NFIL, added that the visibility extended not only to Surat assets but also to the MPP and the dedicated agrochemical plant.
• Key Insight: NFIL has secured firm multi-year orders for its specialty chemicals business, providing greater revenue visibility and certainty compared to past quarters.

CDMO Business Trajectory

• Vive Rajani also asked for a sense of the expected trajectory for the CDMO business in the second half of FY25 and going into FY26, given the traction with European and US clients and the two new molecules.
• Mr. Ganatra responded that they anticipated at least flat growth in Q3 compared to the same period last year, but a very strong Q4, and even stronger growth going forward.
• Key Insight: While specific numbers were not provided, the management expressed strong optimism about the CDMO business growth, driven by large commercial molecules and continued customer acquisition efforts.

CDMO Capacity Concerns and Product Mix

• Sanjay Jen from ICICI Securities raised concerns about CDMO capacity to meet all the orders, given the multiple projects in the pipeline. He also asked if the company was de-emphasizing early-stage molecules.
• Mr. Ganatra clarified that they had planned the GMP4 project to meet the required capacity needs. He also explained that the company is not de-emphasizing early-stage molecules, but rather balancing the mix as commercial molecules start to take a larger share of the pie. The pie itself is growing, and the proportion of revenue from commercial molecules is expected to reach 60%.
• Key Insight: NFIL’s capacity expansion plans align with its order book and strategic focus on commercial molecules, which offer larger volumes and lower risk profiles. The company continues to engage with early-stage opportunities while prioritizing later-stage and commercial molecules.

Specialty Chemicals Domestic Revenue Growth

• Sanjay Jen also questioned the sharp improvement in domestic specialty chemical revenue, assuming NFIL was shifting its focus away from domestic pharma.
• Mr. Ganatra explained that the domestic revenue increase was partly opportunistic due to the current market scenario, and partly due to supplies to local customers on behalf of large global players. The core message remains a strong order book for both Surat and Dahej assets in Q3 and Q4, indicating continued focus on export-oriented specialty chemicals.
• Key Insight: While domestic revenue showed growth, NFIL’s primary focus for specialty chemicals remains on exports, with a strong order book for the second half of the year, driven by both new and older product portfolio recovery.

HPP Business Growth Drivers

• Sanjay Jen asked if it was fair to assume that growth in the high-performance product (HPP) business would be driven solely by pricing until new R22 capacity came online.
• Mr. Kulkarni clarified that growth would be driven by both pricing and volume growth, as they are adding R32 capacity expected to be completed in Q4 FY25.
• Key Insight: NFIL expects continued growth in its HPP business through a combination of pricing and volume increases. The upcoming R32 capacity expansion will further contribute to volume growth.

European CDMO Agreement Clarification

• Ankul Pal from Access Capital sought clarity on the order book visibility, specifically whether it was driven by new products for global innovators or a recovery in demand for older products.
• Mr. Ganatra explained that the visibility stemmed from new molecules introduced in the last 18 months, alongside some recovery in demand for older products.
• Key Insight: NFIL’s order book strength for specialty chemicals comes from both recent product launches and a rebound in demand for existing products, indicating a healthy mix of innovation and market recovery.

Margin Improvement Drivers

• Ankul Pal further inquired about the drivers for achieving the targeted 25% margin, asking whether it would be primarily due to product mix shift or pricing.
• Mr. Ganatra said it would be a combination of factors, highlighting their focus on getting there sustainably.
• Key Insight: NFIL aims to achieve its 25% margin target through a combination of strategic initiatives, including product mix optimization, operational efficiencies, and pricing, while ensuring sustainable growth and profitability.

Management tone shows confidence in company’s growth trajectory across all business segments. Notably, the focus on securing multi-year orders, expanding capacities, and driving innovation positions NFIL favorably for long-term success.

Disclaimer: Invested and Biased. Less than 3% of PF. No transactions in the last 30 days. Post purely for study purposes. Consult your advisor before any investment decisions.

Hi All

I was going through the contents of the situation of European Automobile market and found that some of the plants of big companies are going to shut down in nearby and shares of these European automobile companies are already down by more than 30% (like BMW down by ~33-34%).

As per the Annual report of FY2024 of KPIT 52% of their revenue comes from the European market and if there is that much level of disturbance in the European Market Automobile industry and KPIT being having revenue concentration risk there, then it will impact the KPIT also to very large extent and it takes time to grab the new customer for the company to generate sales and profitability.

I think management is searching for new customers to maintain the sales.

Any views on the above matter.

Sharing below link found on you tube for the views on European Automobile Market.

https://youtu.be/9OjbSdVPEN8?si=5eV2AN2Z54wReGzC