Dear Shareowners,
At the core of Navin Fluorine's ethos lies our relentless drive to empower progress
through innovation, excellence and quality, resonating in every facet of our operations.
Our priorities are simple - relentless pursuit of manufacturing excellence complemented by
disciplined execution of projects within a tight financial framework.
With a strong lineage and a successful track record of disciplined execution from the
outset, we have evolved as a trusted partner, a reliable platform and a pioneer in
delivering innovative solutions involving complex chemistries across diverse applications
on a global scale.
For us, empowering progress is not only about laying a strong foundation for the
present but also for the future, seeking insights and ideas that propel us forward.
This commitment traverses across strategic fronts, business avenues, product
innovations, platforms and partnerships for creating opportunities for growth and
expansion.
As a visible and dependable player, we continue to streamline investments in people,
processes and practices.
ECONOMIC LANDSCAPE
In FY 2023-24, the global economy displayed extraordinary resilience despite
challenges, with steady growth and inflation returning to target ranges. India emerged as
the fastest-growing major economy, fuelled by robust domestic demand, increased
investments and proactive government initiatives. Amidst volatility, India's status as a
preferred manufacturing hub, especially in specialty chemicals is seeing momentum. With
rising global demand for fluorochemicals across sectors like automotive, electronics and
construction, India's enhanced chemical manufacturing industry is gearing up to meet these
needs.
At Navin Fluorine, we are well-positioned to seize these growing opportunities and
navigate the challenges ahead. In our pursuit of excellence, we remain steadfast in
upholding the highest safety and compliance standards, fulfilling our commitment to all
our stakeholders and driving long-term sustainable, profitable growth.
PERFORMANCE REVIEW
In FY 2023-24, our Consolidated Revenues and PAT stood at Rs. 2,065 crores and Rs. 271
crores respectively.
Our Specialty Chemicals business exhibited strong sales of Rs. 848 crores, marking 14%
YoY growth, driven by increased volumes and new product launches. We reported sales of Rs.
955 crores in our HPP segment, indicating an 8% YoY growth, while the CDMO business
generated Rs. 262 crores, a decline of 42% YoY.
High margin CDMO business was impacted due to delayed approval of clinical phase
molecules and a volatile business nature. Despite weak demand, pricing pressures and
destocking by global agrochemical players, our Specialty Chemicals business posted a
commendable performance reflecting strong resilience and stability. Our HPP business
growth was led by the commencement of our new R-32 plant. Growth in HPP business was
subdued primarily due to lower sales driven by a weak summer and pricing pressures and
extended stabilisation of the Orchid plant.
STRATEGIC FOCUS
Navin Fluorine's journey is not solely about creating shareholder value, it is about
crafting value that extends beyond boardrooms and balance sheets. We believe in enhancing
prosperity by creating lasting value for the Group and all our stakeholders. Our stable
stakeholder engagement and a culture of trust and inclusion underscores the Company's
commitment to mutual progress and sustainable development, contributing to nation-building
endeavours.
In FY 2023-24, we focussed on driving operational excellence, ensuring financial
robustness, disciplined execution, diversifying revenue streams, strengthening
partnerships, and building scalable platforms. These efforts help lay a solid foundation
for our long-term sustainable growth and profitability.
The establishment of the Navin Molecular brand symbolises our endeavour to consolidate
our global CDMO operations, extending our expertise beyond fluorination.
We have prioritised the launch of new products and partnerships, to enhance the share
of commercial and late-phase molecules in our portfolio, address business volatility and
streamline operations. Our sustained efforts have resulted in significant milestones,
including multiple MSAs signed for different commercial products with a leading European
CDMO. This has enhanced our capabilities and resulted in a supply chain partnership for
six new commercial products and a significant rise in revenue mix from the commercial
portfolio in the coming years. The growing demand for FDA-approved molecules containing
fluorinated compounds complemented by our capability to handle complex chemistries is
anticipated to drive segment growth.
In the Specialty Chemicals segment, our strategy to transition from pharma to agro
intermediates remains intact and strategically addresses commodity market challenges while
maintaining our focus on Crop Science. Notably, the introduction of new molecules across
performance material, along with the traction gained by products launched over the past
2-3 years, underscores our commitment to deepening our value proposition and building
enduring partnerships with key players in the crop science and performance material
businesses.
Anticipating rising demand for refrigerant gases, our HPP segment has diligently
pursued multiyear partnerships and also expanded our R32 capacity to secure long-term
growth opportunities. Our existing partnerships with key global players have demonstrated
steady growth, while strategic Capex investments continue to unveil new avenues for growth
and innovation.
Our commitment to empower progress on all fronts has prompted significant investments
across our Product, Platform and Partnerships, fortified by strategic Capex initiatives.
Through our investment in the new HF plant at Dahej (NFASL), set to be operational in
2025, we aim to cater to increasing demands from emerging sector, including renewables and
EV markets. Furthermore, Phase 1 of the cGMP4 capex initiative, facilitating the MSA with
European CDMO customer, is expected to commence operations by the end of CY 2025.
Additionally, approved capex for expanding R32 capacity by 4,500 MT, slated for
commissioning by February 2025, is expected to enhance growth in our HPP segment.
We are pleased to announce the commissioning of a new R&D and Pilot Centre,
alongside a state-of-the-art Process Safety Lab to facilitate testing of new molecules
before they are scaled to commercial manufacturing.
Additionally, we have strengthened our team capabilities across the business with key
appointments and focussed employee initiatives.
We pursue financial empowerment through sustained operational profitability underpinned
by robust working capital management, strong operational cash flow delivery and a healthy
balance sheet.
As we navigate profitable growth, we ensure continual returns to our shareholders
through dividends and sustainable value creation.
OUTLOOK
Entering an exciting phase, we will continue to uphold our dual identity as both a
Platform Company and a Partnership Company. We remain committed to disciplined growth
underpinned by a strong financial framework, solidifying our presence as a visible and
dependable partner. Substantial investments in capacity, products, platforms and multiyear
partnerships will help us capitalise on growing opportunities while addressing challenges,
heralding a new era of sustainable growth and expansion.
As we expand within our existing verticals while diversifying into new revenue streams
maintaining robust infrastructure and an engaged workforce remains paramount in the highly
competitive landscape. Enabling mutual progress, we aim to nurture enduring partnerships
with our customers and partners while delivering long-term value for all our stakeholders.
In honour of our founder, Late Shri Arvind N. Mafatlal's centenary birth year, the
Board approved a one-time special dividend of Rs. 3 per equity share, along with an
interim dividend of Rs. 5 per equity share. This marks a tribute to the visionary leader
whose values of trust and inclusion remain integral to Navin Fluorine's ethos.
As we forge ahead with optimism, we extend heartfelt gratitude to our Board,
shareholders and all stakeholders for their unwavering trust and support.
Commemorating our founder's legacy, we will continue to empower progress to shape a
more sustainable future defined by accelerated growth, development and prosperity.
Warm Regards,
Vishad P. Mafatlal
Chairman