SRF: Inflation can impact capex payback period
For FY22, SRF's capex allocation stands at Rs 1,500-1,800 crore. The capex spent so far is nearly Rs 600 crore, which is expected to go up in H2
October 27, 2021 / 02:27 PM IST
PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook
SRF (CMP: Rs 2,111; Market Cap: Rs 62,521 crore) posted another strong quarter as far as top line numbers are concerned. However, margins have turned shaky due to multiple headwinds related to raw material costs and supply-chain challenges.
Among key segments, the packaging business is pointing towards a cyclical downside in margins and the chemical business requires a reset of long-term contracts to pass through input costs.
The demand environment has strengthened, leading to a strong order book in all segments....