Navin Fluorine International · tone and specificity signals across the available quarters.
Language signals
We are not looking at it like a deer who's gazing through headlights. The important part here is to understand that 32 the long-term demand environment remains constructive. We all know that over a decade the demand for 32 is going to double while the supply kotadriven supply is going to shrink to half.
The 90 crores that we are spending is sufficiently risk-managed because there are five products that have already been lab approved. This project while it's an adoption project is also going to self earn for itself and will pay back the money faster. Now this vertical is also going to be highly accreting to our margins.
Numbers tell you only half the story. Q1 of last year, HF prices were very high. Today as we are speaking in a heightening global war tensions with supply chain risk, the cost of raw materials increasing etc. that profile will change. We constantly look for making sure that the price increase or inflation that we are seeing on the RM side is being passed on to the products wherever we have the pricing power.
The growth that we are demonstrating in this quarter is coming across the verticals—it's coming from volume expansion, it's coming from pricing, it's coming from product mix, it's coming from efficiencies, it's coming from a lot of drivers around it.
We had originally given a guidance of 25% EBITDA but we'd always said there was more upside to it than downside. Where we stand now in the first half, given the performance, I think we're well on track to be between 28 to 30% for the year.
We are taking a very measured manner ensuring that as the capacities come up there is a market that we are servicing... these commitments are meant for the midterm. They're not short-term relationships.
About 80-90% of our underlying growth in the margins and that effectively translates down to PAT is coming largely from volume growth. You also have some pricing tailwinds and forex tailwinds which are offset through your sourcing costs.
We have always communicated this very strongly that our priority has always remained on manufacturing excellence as number one priority. We are consistently driving economies and removing inefficiencies in the system.
This is a license to grow capacity... by putting this capacity we are signaling that we will continue to develop chemistry and capability in downstream applications to grow this.
So I think it's safe to think of Navin as a 30% annual number. But let's not kind of hold that on a quarterly sort of treadmill run rate.