Navin Fluorine International : Q4 & FY23 Earnings Call Transcript

May 17, 2023
BSE Limited	National Stock Exchange of India Limited
Phiroze Jeejeebhoy Towers,	Exchange Plaza,
Dalal Street, Fort,	Bandra Kurla Complex, Bandra (East),
Mumbai 400001	Mumbai 400051
Scrip Code: 532504	Symbol: NAVINFLUOR EQ

Dear Sir / Madam,

Sub.: Transcript of Earnings Call held for the quarter and financial year ended March 31, 2023

Pursuant to Regulation 30 read with Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the transcript of the Company's Earnings Call held on May 13, 2023 regarding discussion on operational and financial performance for the quarter and financial year ended March 31, 2023 (Q4 and FY 2022-23) is enclosed herewith.

This intimation is also being made available on the Company's website at www.nfil.in.

Request you to take this intimation on record.

Thanking You,

Yours faithfully,

For NAVIN FLUORINE INTERNATIONAL LIMITED

Niraj Bipin Mankad

Digitally signed by Niraj Bipin Mankad Date: 2023.05.17 15:06:49 +05'30'

Niraj B. Mankad

President Legal and Company Secretary

Encl.: a/a

Navin Fluorine International Limited 602, 6th Floor, Natraj by Rustomjee, 194, M.V. Road & Western Express Highway, Near Kanakia 351 Building, Andheri (East), Mumbai 400069 India. T: [phone] F: [phone] E: [e-mail] W: www.nfil.in

CIN: L24110MH1998PLC115499

"Navin Fluorine International Limited

Q4 & FY '23 Earnings Conference Call"

May 13, 2023

MANAGEMENT: MR. RADHESH WELLING - MANAGING DIRECTOR - NAVIN FLUORINE INTERNATIONAL LIMITED

MR. ANISH GANATRA - CHIEF FINANCIAL OFFICER - NAVIN FLUORINE INTERNATIONAL LIMITED INVESTOR RELATIONS PARTNER - ORIENT CAPITAL

MODERATOR: MR. BHAVYA SHAH - ORIENT CAPITAL

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	Navin Fluorine International Limited
	May 13, 2023
Moderator:	Ladies and gentlemen, good day, and welcome to the Navin Fluorine International Limited Q4
	FY '23 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only
	mode, and there will be an opportunity for you to ask questions after the presentation concludes.
	Should you need assistance during this conference call, please signal an operator by pressing
	star and then zero on your touchtone phone. Please note that this conference is being recorded.
	I now hand the conference over to Mr. Bhavya Shah from Orient Capital. Thank you, and over
	to you, sir.
Bhavya Shah:	Thank you, and welcome to the Q4 and FY '23 Earnings Conference Call. Today on this call,
	we have Mr. Radhesh Welling, Managing Director; and Mr. Anish Ganatra, Chief Financial
	Officer of Navin Fluorine International Limited. This conference call may contain forward-
	looking statements about the company, which are based on beliefs, opinions and expectations as
	of today. Actual results may differ materially. These statements are not the guarantees of future
	performance and involve risks and uncertainties that are difficult to predict. Our detailed safe
	harbor statement is given on Page number 2 of investor presentation of company which has been
	uploaded on the stock exchange and company's website as well.
	With this, I now hand over the call to Mr. Radhesh Welling for his opening remarks. Over to
	you, sir.
Radhesh Welling:	Hello. Thank you very much. Good evening, and a warm welcome to all the participants. I want
	to take a moment to acknowledge the inconvenience of calling you all on a Saturday evening for
	earnings call as I had to travel for some business from tomorrow onwards. We understand that
	this may disrupt your weekend plan and we sincerely appreciate your flexibility and
	consideration in joining us on short notice. Thank you for your continued support and
	commitment to Navin Fluorine.
	On this call today, I'm joined by Mr. Anish Ganatra, Chief Financial Officer, and our Investor
	Relations partner, Orient Capital. I hope all of you got an opportunity to go through our financial
	results and investor presentation, which have been uploaded on the stock exchanges as well as
	on the company's website.
	Let me now start with key highlights for the quarter and year ending FY '23, followed by
	business segment-wise updates, and then we'll take you through financial highlights for the
	period under review.
	I'm pleased to announce that our performance in FY '23 has achieved several new milestones.
	For full year FY '23, we achieved a key milestone of revenues from the operations exceeding
	INR2,000 crores. Operating EBITDA crossed INR550 crores and Operating PBT crossed
	INR460 crores. For Q4 FY '23, we have reported quarterly revenue of INR697 crores. Operating
	EBITDA has more than doubled at INR202 crores on Y-o-Y basis. EBITDA margin stood at
	28.9%, an expansion of 586 basis points.
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Navin Fluorine International Limited

May 13, 2023

Commercial production at 3 of our new plants, HPP, MPP and Agro-Intermediate plant has commenced successfully in the last fiscal. We have begun commercial production of two new molecules at our MPP plant in Q4 FY '23 and expect to launch at least 1 new molecule in FY '24. R32 capex of INR80 crores in Surat will be commissioned as per schedule, and the sales should start from Q2 FY '24. This demonstrates the strength of our business model and execution capabilities developed over the years. We improved our performance in uncertain times, captured growth opportunities, executed multiple projects successfully and accelerated our journey towards becoming the company we want to become in the future.

Now some refresh and some additional updates. In line with our growth plan in March 2023, Navin Fluorine Advanced Sciences Limited, our wholly owned subsidiary, announced a capital expenditure of INR450 crores of setting up a new 40,000 metric tons per annum hydrochloric acid plant at Dahej. The new capacity is expected to come onstream in 2 years. The capex is starting to progress well and is expected to be commissioned on schedule. With this capacity, we will be prepared to address rising demand in the pharmaceutical and agrochemical sector as well as in the emerging areas like EV battery chemicals, solar, etcetera.

Apart from the ongoing expansions, which are scheduled to be completed by FY '25, we are in the process of finalizing business plans for two projects to be presented to the Board for approval in calendar year 2023. These two projects are CDMO and cGMP4 and another project we have been working on the specialty sector, the specialty business unit. We have taken our annual plant shutdown for HFO in Dahej, along with annual plant shutdown of 1 of the HF plants in Surat in the month of April.

We are pleased to inform you the Board of Directors have recommended a final dividend of INR7 per equity share of face value of INR2 each, subject to approval of shareholders. With this, the total dividend for the last year will be INR12 for the face value of INR2 each. I would now like to discuss the operating performance of each business units.

Happy to report that all our business units, Specialty, HPP and CDMO delivered highest ever quarterly revenues and profitability. Specialty business continues to deliver strong performance, driven by strong partnerships and new technology platforms. We reported revenue growth of 28% on a Y-o-Y basis at INR204 crores for Q4 FY '23. In the fourth quarter of FY '23, introduction of new products has made impact on our performance. These innovative offerings are designated positively with customers contributing to our overall growth. Agrochemical Intermediate plant achieved optimal capacity utilization in the last quarter.

Our HPP business generated revenue of INR289 crores, growth of 92% in Q4 FY '23 as compared to the same period last year.The recent increase in sales can be attributed primarily on account of increased volume from NFASL, our subsidiary. We are pleased to report that our client is currently operating at optimal capacity resulted in desired units. Furthermore, we are excited to announce that the commissioning of R32 project in Surat is progressing as scheduled, and we anticipate commencing production from beginning of Q2 FY '24. We remain committed

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Navin Fluorine International Limited

May 13, 2023

to driving profitability, enhancing operational excellence, and seizing opportunities for further success.

Our CDMO business has reported highest ever quarterly revenue of INR203 crores reflecting Y-o-Y growth of 106% as compared to the same period last year. Business is on strong footing and trying for further capacity expansion. Our revenue in Q4 FY '23 has doubled surpassing our stated guidance of approximately $10 million quarterly run rate on an annualized basis. This exceptional performance is testament to the dedication and hard work of our team as well as to our strong partnerships. This places our CDMO business a robust position and in an opportune space to pursue further expansion in the future. We are confident in our ability to capitalize on these market opportunities and are actively exploring options for further capacity expansion to meet the increasing demands.

I'll now hand over the line to our CFO, Mr. Anish Ganatra, to give you a brief on the financial performance of the company. Thank you, very much.

Anish Ganatra:Thank you, Radhesh. Good evening to all the participants. I will share the highlights of our performance for FY '23 and Q4 FY '23, post which we'll be happy to take questions.

For FY '23 on a consolidated basis, the company reported revenue from operations of INR2,077 crores, as against INR1,453 crores in FY '22, a growth of 43% year-on-year. Operating EBITDA stood at INR550 crores as against INR355 crores in FY '22, up by 55%. Operating EBITDA margin stood at 26.5% as against 24.4% in FY '22, an increase of 207 basis points.

Operating PBT was up 51% at INR460 crores for FY '23 as against INR305 crores in FY '22. Operating PBT margin was at 22.2% in FY '23 as against 21% in FY '22, a jump of 116 basis points year-on-year. Profit after tax stood at INR375 crores for FY '23 as against INR263 crores in FY '22, a growth of 43% year-on-year. PAT margin was at 18.1% for FY '23 and remain constant against FY '22.

Now coming to the quarter performance for Q4 FY '23. Company reported a growth of 70% in net revenue from operations to INR697 crores against INR409 crores in Q4 FY '22. Operating EBITDA grew by about 114% year-on-year to INR202 crores as against INR94 crores in Q4 FY '22. EBITDA margin stood at 28.9% for Q4 FY '23, an increase of 586 basis points. Operating PBT stood at INR180 crores, growth of 120% as compared to the same period last year. PAT stood at INR136 crores for Q4 FY '23 as against INR75 crores in Q4 FY '22 with a growth of 81%.

Before we start with the question and answers, I would like to refer to a couple of items in the financials of this quarter and year-end. During the year, the company initiated an exercise to assess the estimated useful life of assets, plant and machinery and buildings with the help of external technical consultants, the exercise covered assets at Dahej, our greenfield development, which started commercial operations during the year and at Dewas, the CDMO assets.

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