Target: ₹4,625
CMP: ₹3,695.60
We attended the call held by Navin Fluorine International (NFIL) to update on the resignation of the CEO, Radhesh Welling.
Vishad Mafatlal, the Chairman handled most of the queries. The search for a senior professional as a successor is underway and will be updated in due course. The management mentioned that all the top clients have been informed about this transition and all of the major capex is on track although there could be slight delays of a quarter or so.
The management has implemented tools such as ESOP schemes, training programs and healthy remuneration to strengthen employee retention. Smooth transition will be facilitated for the incoming CEO who is most likely to be an external candidate having strong technical and leadership attributes.
Although the management did attempt to assuage investor concerns by stating that major capex plans and client engagements stay on track, we believe that recent exits of the CDMO head and the CEO are valid concerns warranting a cut in target multiple.
We maintain our Buy rating with a downward revised target price of ₹4,625 at 40x FY25E (Earlier 45x) earnings.