Feb 16, 2017 03:11 PM IST | Source:

Hold SRF; target of Rs 1738: Edelweiss

Edelweiss recommended hold rating on SRF with a target price of Rs 1738 in its research report dated February 14, 2017.

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Edelweiss' research report on SRF

SRF’s Q3FY17 revenue, at INR11.3bn (net of excise, up 3% YoY), was in line with estimate. While growth revival in technical textile segment continued this quarter also (revenue up 13% YoY), the chemical & polymer segment (C&P) reported 4% YoY decline, a first in past 11 quarters. This was mainly due to the specialty chemical division where global agrochemical slowdown continued to impact performance.


As we roll over to FY19E, we expect the specialty chemical segment to clock 21% CAGR over FY17-19E driven by improving global agrochemical market. However, the stock still offers limited upside and we would look at upgrading valuations as we see growth coming in. We maintain ‘HOLD’ with SoTP-based TP of INR 1,738.

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