Neutral SRF; target of Rs 2500: Motilal Oswal

Motilal Oswal's research report on SRF

SRF reported healthy operating performance with 23% YoY growth, driven by Chemical business (3.2x of total incremental EBIT YoY). However, it missed our estimates due to lower-than-expected margins in Packaging and Technical textile business (EBIT decline of 43%/53% YoY, respectively) in 2QFY23. Factoring in the 2QFY23 performance with lower-than-estimated EBIT, we decrease our FY23E/FY24E earnings by 5%/1%, respectively. We reiterate our Neutral rating, owing to its rich valuation, which has been priced into the near-term upside.

Outlook

Factoring in the 2QFY23 performance with lower-than-estimated EBIT, we decrease our FY23E/FY24E earnings by 5%/1%, respectively. We reiterate our Neutral rating owing to its rich valuation, which has been priced into the nearterm upside.

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SRF - 07-11-2022 - moti