Navin Fluorine share price rose 2 per cent to hit a 52-week high in morning trade on the BSE on Wednesday, June 18. Navin Fluorine shares opened at ₹4,703.45 against their previous close of ₹4703.45 and climbed 2 per cent to their 52-week high of ₹4,798. Around 10 AM, the speciality chemicals stock traded 0.92 per cent up at ₹4,746.50. Equity benchmark Sensex was 0.16 per cent up at ₹81,710 at that time.
Navin Fluorine's share price has gained about 45 per cent year-to-date (YTD) despite stock market volatility.
The mid-cap stock has given multibagger returns of nearly 200 per cent over the last five years, while over the last year, the stock has gained over 30 per cent.
On a monthly scale, the stock has gained about 12 per cent in June so far after a 6 per cent fall in the previous month.
Navin Fluorine share price hit a 52-week low of ₹3,164 on September 19 last year.
Navin Fluorine: Is it a stock to buy?
Recent significant gains in the stock price have inflated its valuations. Experts point out that its trailing twelve-month price-to-earnings ratio (PE), at 81, is high in the industry.
However, the company's growth outlook appears healthy. In Q4FY25, its profit after tax (PAT) jumped 35 pr cent year-on-year (YoY) to ₹94.95 crore, while operating profit jumped 70 per cent YoY to ₹143.45 crore. Operating margin also saw a healthy growth of nearly 46 per cent YoY to 20.5 per cent. Revenue from operations rose 16 per cent YoY to ₹701 crore.
According to reports, Avendus has initiated coverage on the stock with a buy rating, pegging the target price at ₹4,800.
The brokerage firm pointed out that asset turns are expected to rise from 0.9 times (FY25) to 1.2 times (FY27E), supporting RoIC expansion to 18 per cent.
"With commissioning of larger cGMP facilities capable of handling late-stage and mature molecules, CDMO biz expected to see greater stability and reduced earnings volatility," media reports quoted Avendus as saying.
While the stock appears to be a long-term bet, some technical experts appear cautious about the stock.
Anshul Jain, Head of Research at Lakshmishree Investments, underscored that Navin Fluorine has broken out of a 29-day-long rounding bottom with the breakout level placed at ₹4,720.
Jain added that the immediate breakout target is at ₹5,050, based on the pattern projection.
However, he added it's important to note that the base is in a late-stage formation and lacks strong institutional volume support.
"This indicates reduced conviction in the breakout and a higher risk of failure. Traders are advised to exercise caution and only consider longs if strong follow-through volume confirms the breakout in the coming sessions," said Jain.
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, suggests profit booking in the stock.
"Currently, profit booking is advisable in the ₹4,800–4,900 zone, as this range aligns with the May 2023 peak, which is likely to act as a strong resistance area," said Patel.
Patel pointed out that daily and weekly charts are showing signs of negative divergence, indicating a possible exhaustion in the ongoing upward momentum.
This technical setup suggests that the price action may face difficulty sustaining further gains in the near term.
"Traders should remain cautious at higher levels and consider booking profits or trailing stop-losses accordingly. A clear breakout above ₹4,900 with volume would be needed to negate this bearish divergence signal," said Patel.
Read all market-related news here
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.