Reduce SRF; target of Rs 2036 Prabhudas Lilladher

Prabhudas Lilladher recommended reduce rating on SRF with a target price of Rs 2036 in its research report dated October 24, 2024.

Broker Research

October 24, 2024 / 11:03 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on SRF

Chemicals segment experienced 8% sequential decline in revenue in Q2FY25 due to continued slowdown in agrochemical. Fluorochemicals business faced challenges with subdued export realizations, although the domestic market for refrigerant gases performed well. BOPET film segment is expected to witness demand-supply imbalance for some time, resulting in 70bps sequential EBIT margin decline for the packaging film business. Packaging revenue increased by 27% owing to better domestic prices. Textiles business posted healthy sales volumes in belting fabrics; however, increased pressure from cheaper imports affected margins. Looking ahead, we expect continued strength in the domestic refrigerants market.

Outlook

However, challenges remain with weak agrochemical demand and oversupply from Chinese competitors, which could pressure margins in the near term. Given these factors, we remain cautious about the stock and maintain our ‘REDUCE’ rating, with SOTP-based target price of Rs2,036.

For all recommendations report, click here