Optimism is driven by newly commissioned capacities, strengthening of the specialty chemicals pipeline and planned expansion of production facilities.
Management has guided for a strong operating margin before depreciation and amortization (EBITDA margin) outlook for the current fiscal year.
The company’s business related to contract development and manufacturing organization (CDMO), which contributed 14% of revenue in the December 2025 quarter, is growing faster than other verticals.
The CDMO division is expected to remain on the growth path with capacity additions. The recent commissioning of its cGMP-4 (Current Good Manufacturing Practice) facility provides CDMO’s revenue outlook for nearly three years.
Institutions Other verticals of specialty chemicals, which accounted for 40% of the December quarter’s revenue, also performed well.
As part of its expansion in this area, NFI is in the process of building a facility to produce immersion cooling fluids in partnership with US-based Chemors. The project is on track for completion in the first quarter of FY27 and is expected to enhance the company’s position in the global fluorochemical value chain.
Capacity building projects are also underway in other areas. The company is shutting down its multipurpose plant in Dahej, Gujarat, which manufactures a range of specialty and agrochemical intermediates, to increase production. The project is slated for commissioning in the December quarter of FY27.
NFI is increasing R-32 (a widely used hydrofluorocarbon refrigerant) capacity to 15,000 MTPA under its extensive hydrofluorocarbon expansion program, with completion targeted for the December 2026 quarter.
These investments are designed to meet growing domestic and export demand by creating new applications and regulatory changes in the refrigeration market.
The company expects to maintain EBITDA margins around the 30% level, supported by operating leverage from new assets, better gains from higher value products, and a gradual ramp-up of recently scheduled facilities. JM Financial Institutional Securities has raised FY26-28E EBITDA estimates by 18-21% and EPS estimates by 18-24%.
