Buy SRF; target of Rs 3540: Sharekhan

Sharekhan's research report on SRF

Company reported a revenue of Rs. 3,819 crore, up 10.2% y-o-y. It was led by the chemical segment with revenue of Rs. 1,839 crore, an increase of 24.1% y-o-y while technical textiles revenue of 467 crore declined 11.2% y-o-y. Operating profit of Rs. 830 crore, up 37.5% y-o-y was robust led by margin increase in the chemical and packaging film segment. The company has maintained its 20% revenue growth guidance for the chemical business. Specialty chemicals is expected to do well with traction in newly launched products and launch of AIs. In fluorochemicals, there is going to be good demand and pricing environment for ref gas.

Outlook

We maintain a Buy on SRF with a PT of Rs. 3,540, assigning a 37x multiple on its FY27 EPS. The stock is currently trading at 45x/33x its FY26/27 EPS.

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