Buy SRF; target of Rs 3100: Emkay Global Financial

Emkay Global Financial is bullish on SRF has recommended buy rating on the stock with a target price of Rs 3100 in its research report dated January 31, 2025.

Broker Research

February 03, 2025 / 21:05 IST

BUY

Emkay Global Financial's research report on SRF

SRF is seeing gradual uptick in its specialty chemical business from existing products, and healthy contribution is expected from new AIs in FY26, iii) refrigerant gases like R22 and R32 are seeing a firm pricing environment across geographies. Chemicals business (CB) has reported a beat in Q3FY25 (revenue higher 10% QoQ/7% YoY) with higher margins (EBIT margin of 24.3% vs 18%/23% in Q2FY24/Q3FY25), and Q4 is expected to be reasonably better YoY. Packaging Films business (PFB) saw stable performance and registered improvement in margins sequentially. We change FY25E/26E/27E EPS by -5%/+2.7%/+12% owing to expectation of recovery and stronger business environment in FY27.

Outlook

We upgrade SRF to BUY from Add and raise our SoTP-based TP by over 19% to Rs3,100, as we believe i) the worst is behind for all of its businesses,

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