Neutral SRF; target of Rs 2415: Motilal Oswal

Motilal Oswal's research report on SRF

SRF posted a strong 4QFY22 with revenue growing across all businesses, mainly driven by Chemicals and Packaging segments. Operating performance was primarily led by the Chemicals business (76% of total incremental EBIT YoY). Considering the 4QFY22 performance with higher-than-estimated Chemicals EBIT, we upgrade our FY23E/FY24E earnings by 14%/8%, respectively. We are encouraged by the long-term structural opportunity in the Chemicals sector. While we certainly believe the company can cash-in on these opportunities, we maintain our Neutral stance owing to high valuations, which have been priced into the near-term upside. .

Outlook

We are encouraged by the long-term structural opportunity in the Chemicals sector. While we certainly believe the company can cash-in on these opportunities, we maintain our Neutral stance owing to high valuations, which have been priced into the near-term upside.

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