Sharekhan's research report on SRF
Q1FY25 revenues rose 4% y-o-y to Rs. 3,464 crore, but fell 3% q-o-q. Operating profit totaled Rs. 603 crore, falling 13% both y-o-y and q-o-q. Margins were recorded at 17%, down by 344 basis points y-o-y and 207 basis points q-o-q. PAT stood at Rs. 252 crore, showing a decrease of 30% y-o-y and 40% q-o-q. Chemicals segment’s financials dropped, with revenues at Rs. 1,482 crore, down 11% y-o-y and 16% q-o-q, EBIT standing at Rs. 306 crore down 33% y-o-y and 38% q-o-q, and EBIT margins at 21% down 703 basis points y-o-y and 673 basis points q-o-q.Capex of Rs. 2000 crore for FY25 has been lowered to Rs. 1500-1900 crore.
Outlook
We retain a Buy with a revised PT of Rs. 2,663, reflecting a valuation of 31x PE based on projected FY26E EPS of 76.09, amid ongoing challenges in the chemicals business.
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