Reduce SRF; target of Rs 2048: Prabhudas Lilladher

Prabhudas Lilladher recommended reduce rating on SRF with a target price of Rs 2048 in its research report dated July 25, 2024.

Broker Research

July 26, 2024 / 11:44 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on SRF

Chemicals segment experienced an 18% sequential decline in revenue in Q1FY25. The decline was due to inventory rationalization by key customers and weak demand for key agro intermediates, which negatively impacted the Specialty Chemicals business. The Fluorochemicals business also faced challenges, with lower margins in Chloromethane; however, Refrigerant Gases performed well in the domestic market. BOPET Film segment continued to struggle with an oversupplied market, whereas the BOPP Film segment benefited from higher margins, resulting in a 22% YoY increase in the Packaging business revenue. Textiles business demonstrated resilience with a healthy 13% revenue increase YoY, driven by strong volumes in Nylon Tyre Cord Fabrics and Polyester Industrial Yarn. Looking ahead, the company is expected to perform better in the Fluorochemicals segment.

Outlook

However, there are concerns about agrochemical demand and excess supply from Chinese competitors, which could impact margins in the near term. We remain cautious on the stock and maintain our ‘REDUCE’ rating on the stock with SOTP-based target price of Rs2,048.

For all recommendations report, click here