Cummins India and Navin Fluorine International: Weekly Recommendations

The two stocks recommended by SMC Global Securities’ Research Team this week are Cummins India and Navin Fluorine International. These two stocks have shown great potential with positive financial estimates for the next financial year. So, let’s go through the details of the two stock recommendations for the period between June 2, 2025 and June 6, 2025.

Cummins India Limited

Cummins India share price is ₹3,267.15 (as on May 30, 2025) and its target price is set at ₹3,929 with an upside potential of 20%.

Cummins India Limited: Investment Rationale

• Cummins India Limited is one of the leading power solutions providers in the country. Cummins India is a leading manufacturer of diesel and natural gas engines. The company is engaged in the business of manufacturing, trading, and selling engines and allied activities.
• It has a strong manufacturing backbone and has five state-of-the-art manufacturing plants, assembly, and distribution facilities, with over 480 customer touchpoints.
• It has expanded its footprint across key industrial segments. In railways, it supplied complete DETC propulsion packages, CPCB IV+ diesel alternator sets, and Hotel Load Converters. For marine, it delivered a 1.5 MW genset for INS Vikramaditya and 2.3 MW propulsion engines to L&T.
• In defence, demand surged for >400HP engines for missile carriers and artillery guns, with a proto engine delivered for the Zorawar light tank. In construction, QSB4.5 and QSB6.7 engines were certified for CEV BS V. Distribution saw robust sales of DF Kits, RECDs, DEF IBCs, and new brake linings, clutches, and fuel quality kits.

• It has sustained strategic capital investments, emphasizing capacity expansion, emission-compliant products, and infrastructure upgrades. It allocated 150-300 crore for new product development, engineering capabilities, and facility improvements.
• A long-term investment of ₹2,000 crores over five years was committed to expanding capacity near Pune. These efforts focus on developing CPCB IV+ emission-compliant products, aligning with evolving regulatory standards and rising market demand, thereby reinforcing the company’s commitment to sustainable and future-ready growth.
• The management of the company remains optimistic about domestic growth, supported by stable demand and a strong channel network. The company expects double-digit growth in FY26, driven by increasing demand in the power generation, industrial, and aftermarket segments.
• However, the export outlook remains uncertain, with mixed signals from global markets. To address this, the company continues to strengthen its distribution networks and enhance product availability, focusing on improving market access and ensuring long-term strategic positioning amid global volatility.
• For FY25, it has reported strong annual growth, with total sales up 15% to ₹10,166 crores and PBT rising 16% to ₹2,496 crores. Domestic sales climbed 18%, supported by robust infrastructure and industrial demand, while exports grew 6%. Despite a weak Q4 sequentially. Going forward, export traction and margin management will be key focus areas.

Cummins India Limited: Shareholding Pattern

Promoters’ shareholding is highest in Cummins India at 51%.

Cummins India Limited: Valuation

The company is doing well and has achieved a milestone with over ₹10,000 crores in annual revenue while maintaining healthy profit margins. It has seen a partial recovery in export demand, supported by partnerships in key markets. While global trade and tax uncertainties persist, easing geopolitical tensions and strong domestic demand offer optimism.

Stabilizing macro indicators like INR/USD rates and crude prices further support the outlook. With a strong brand, advanced technology and robust manufacturing capabilities, it is well-positioned for sustainable growth. Its solid financials and liquidity provide resilience and strategic flexibility for long-term growth prospects.

Thus, it is expected that the stock may see a price target of ₹3,929 in 8 to 10 months’ time frame on an expected P/BVx of 13x and FY26 BVPS of ₹302.25E.

Cummins India Limited: Risk

• Intense competition
• Economic slowdown

Navin Fluorine International Limited

Navin Fluorine International share price is ₹4,264.70 (as on May 30, 2025) and its target price is set at ₹5,024 with an upside potential of 18%.

Navin Fluorine International Limited: Investment Rationale

• Navin Fluorine International Ltd. (NFIL) is a leading Indian fluorochemical company, part of the Padmanabh Mafatlal Group, specializing in refrigeration gases, inorganic fluorides, specialty organofluorines, and CRAMS.
• It operates facilities in Surat, Dewas, and Dahej, serving pharmaceuticals, agrochemicals, and specialty chemicals industries.
• The company has entered into a strategic agreement with Chemours to produce the proprietary product, Opteon, a two-phase immersion cooling fluid. This manufacturing partnership leverages Chemours’ innovation and Navin’s manufacturing expertise to address the data cooling center needs created by Al and next-generation chips.
• With this partnership, the company would foray into the Advanced Materials segment. Under the agreement, Navin Fluorine will establish a manufacturing facility at Surat at an estimated capex of US$14 million, including US$5 million of contribution by Chemours. The project is expected to be operational during quarter 1 of FY’27.
• It has tied up with BUSS ChemTech AG, Switzerland, as a technology partner to commercialize solar and electronic grade HF exclusively for the company. BUSS ChemTech AG has been a leader in this space for over a century.

• The company has announced its R32 project, which will be commercialized in March 2025 and is currently operating at optimal capacity. This is a significant validation of its R&D and execution capabilities, and it adds further momentum to its High-Performance Products business, where it continues to see strong demand and pricing traction in both HFO and R32.
• Its ongoing Anhydrous Hydrofluoric Acid (AHF) project is progressing well, with the completion expected by Q2 FY 2026. And the cGMP4 Phase I facility remains on track for commercialization in Q3 FY 2026.
• The company remained focused on scaling its businesses, strengthening its technology platforms, building up strategic partnerships, and delivering sustainable growth to create long-term value for all its stakeholders.
• In the Specialty Chemicals business, the company is operating at optimal capacity utilization at both Dahej and Surat, and has good order visibility for FY’26. After successful validation by its global agrochemical partners, the company is also introducing two fluoro intermediates for its new innovative Al in FY 2026.
• In Q4 FY2025, it reported strong revenue growth across business segments and improved overall EBITDA margin at 25.5% as compared to 18.3% last year. The CDMO business recorded strong performance in the Q4 FY2025.
• This growth has been driven by both repeat orders and new project wins. Looking ahead, its cGMP4 capex of ₹288 crores is progressing as planned. Phase 1, which involves ₹160 crores of investment, is on track to be commissioned by the end of Q3 FY2026.

Navin Fluorine International Limited: Shareholding Pattern

In the overall shareholding of Navin Fluorine International, institutional investors have the highest shareholding at 30.04%.

Navin Fluorine International Limited: Valuation

The company is poised for growth, driven by its leadership in fluorochemicals and capacity expansions in high-margin specialty chemicals and CRAMS. Long-term contracts and a strong R&D focus ensure earnings visibility.

Thus, it is expected that the stock may see a price target of ₹5,024 in 8 to 10 months’ time frame on target P/BV of 8.40x and FY26 BVPS of ₹598.06.

Navin Fluorine International Limited: Risk

• Geopolitical Risks
• Economic slowdown

Conclusion

These two stocks, one from the auto ancillaries sector and other from the chemical sector can reach their target price in the coming 8 to 10 months. However, it is always better if you do your analysis before investing and set a stop-loss target. To keep track of your invested stocks, open demat account with SMC Global Securities and invest on the go.

Reference:
https://www.smctradeonline.com/research/wise-money/241

Author: All Content is verified by SMC Global Securities.