Broking house, Anand Rathi Securities has recommended buy rating on the SRF .
Anand Rathi Securities report on SRF:
"SRF [CMP 220/-] : - Company is domestic market leader in all of its key segments viz. - Tyre Cord Fabrics [35% Mkt share], Belting Fabrics [70% Mkt share] and Refrigerant gases [39% Mkt share]. Globally also its placed at 8th largest and 5th largest player in Tyre cord and Belting fabrics business respectively. The other business is Packaging film [PET/BOPET, 13% Mkt share] where it has set up large capacity. It is also in to pharma-chemical and intermediate business plus PTFE [Teflon] business. But the key upward thrust in the profits is coming from the transfer of CERs [Certified Emmission Reductions] to be recieved under CDM [Clean Development Mechanism, under Kyoto Protocol.]"
"Company has potential to generate 3.8 million CERs per annum through CDM mechanism and these CERs will continue to accrue for coming 5 years at least, [so its not a one off income] which will boost its earnings on sustained basis for next 5 years by adding more then 300 crs to profits for company every year. In H-1 of current year, company has already realised Rs 282.65 crs by transfer of 1.48 mill CERs. This kind of huge cash flow will enable company to reduce the debt from the balance sheet as well as fund the new business plans. Based on expected 07 earnings of over Rs 31/- stock is going dam cheap at current price. BUY."
