Buy SRF; target of Rs 1390: Emkay

Emkays research report on SRFOn standalone basis, results were marginally lower than our est mainly as company’s technical textiles division was affected by floods in Chennai. SRF posted sales of Rs 8.6bn (down 2.5% yoy) as technical textiles reported decline in revenues EBITDA at Rs 1.9bn was up by 14%yoy (lower than est Rs 2.1bn) with PAT growth of14.5% to Rs 831mn (short of our est of Rs 989mn) as technical textile segment reported lower than estimated profit Consolidated results with PAT growth of 41% yoy to Rs 1bn benefited from higher margins in packaging film and chemicals business Strong growth in chemicals & polymers business has partially offset weak performance in technical textiles division. Maintain our price target to Rs1,390 based on 16xFY17 EPS and maintain Accumulate rating.Earnings growth remain strong, maintain Accumulate Standalone PAT for the quarter at Rs 831 (+14.5%yoy) was lower than est Rs 989mn while consolidated APAT grew by 41% to Rs 1 bn as company’s global packaging film business witnessed improvement in margins from 7% to 13% and chemicals and polymers division reported healthy margin expansion of 340 bps yoy to 28. We maintain our price target at Rs 1390 (16xFY17E) and maintain Accumulate Rating. For all recommendations, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions

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