Sushil Finance has maintained 'Buy' on Navin Fluorine International (NFIL) with target price of Rs 590 as against current market price of Rs 420 in its report.

Commenting on the investment rationale, the stock broker said, "Specialty chemicals division witnessed strong growth of 38%, while refrigerant business grew by a healthy 26% in FY15. In organic fluoride division however witnessed slowdown declining by 7% YoY. We believe the management can deliver 20% CAGR in each of the segment for the next three years The company would also supply raw materials to the JV with Piramal and hence would see decent growth in existing business. 

At the CMP of Rs 818 the stock is trading at 12.9x /9.4x its FY16/17 EPS of Rs 63.5/Rs 87.1 respectively. On EV/EBITDA basis it is trading at 9.7x/ 6.5x its FY16/17 EBITDA respectively. The stock price of the company has appreciated over 110% over the last one year. However, we believe the earnings visibility of the company has improved due on time completion of Dewas plant and its JV with Piramal Enterprise. We expect the ROE and ROCE of to improve to 13.2% and 13.6% by FY17 from 7% & 8.9% respectively due to higher contribution from the high margin CRAMs business. Considering higher earnings visibility with better return ratios  we believe the stock still has potential for re-rating and hence we have valued the stock at 12x its FY17 EPS & arrived at a revised target price of Rs 1,050 (upside 28%) and Maintain Buy on it."

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