Motilal Oswal's research report on SRF
In this report, we have analyzed SRF’s Packaging Films division. The company has aggressively expanded its capacity to capitalize on the impending opportunity in the Packaging Film industry, with a shift in consumer buying behavior. We have analyzed the Packaging Film industry and the competitive intensity of SRF. The key highlights are as follows: Over the last seven years, SRF aggressively incurred a cumulative capex of INR32.3b on building its Packaging Film division, resulting in an industry leading revenue/EBIDTA CAGR of 21%/39%, followed by Polyplex Corporation (PPC) at 11%/24%. Global demand for Packaging Films is expected to be driven by low penetration of packaged food, higher adaptability of Flexible Packaging, rising trend toward easily recyclable packaging solutions, innovative packaging, and e-commerce. However, higher competitive intensity and additional capacity build up in the industry may pressurize industry profitability in the short term.
While we expect the management to cash-in on these opportunities, we maintain our Neutral rating, given to its rich valuation, which has been priced into its near-term upside.
At 17:30 SRF was quoting at Rs 2,573.10, down Rs 49.90, or 1.90 percent.
It has touched an intraday high of Rs 2,638.30 and an intraday low of Rs 2,560.40.
It was trading with volumes of 24,709 shares, compared to its thirty day average of shares, a decrease of percent.
In the previous trading session, the share closed down 0.09 percent or Rs 2.25 at Rs 2,623.00.
The share touched its 52-week high Rs 2,864.35 and 52-week low Rs 1,975.00 on 14 September, 2022 and 29 November, 2021, respectively.
Currently, it is trading 10.24 percent below its 52-week high and 30.18 percent above its 52-week low.
Market capitalisation stands at Rs 76,273.07 crore.
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