Neutral SRF; target of Rs 2680: Motilal Oswal

Neutral

Motilal Oswal's research report on SRF

SRF reported muted operating performance (EBIT grew 2% YoY), primarily led by a steep decline in EBIT of Technical Textile/Packaging (47%/85% YoY). However, the chemical business recorded a 47% YoY growth in EBIT, driven by strong demand in both specialty and fluorochemicals, as well as higher realization in Ref gas. We increase our FY24 EBITDA estimates by 5%, on the back of better-thanexpected margins in chemical business; however, we maintain our F25E EBITDA. We reiterate our Neutral rating on the stock, owing to its rich valuation, which has been priced into the near-term upside.

Outlook

We increase our FY24 EBITDA estimates by 5%, on the back of better-thanexpected margins in the chemicals business; however, we maintain our F25E EBITDA. We reiterate our Neutral rating on the stock with an SoTP-based target price of INR2,680, owing to its rich valuation, which has been priced into the near-term upside.

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SRF - 11 -05 - 2023 - moti