Reduce SRF; target of Rs 2127: Prabhudas Lilladher

reduce

Prabhudas Lilladher's research report on SRF

Both Chemicals and Packaging Films segments witnessed decline in revenues of 21% and 9% YoY while Technical Textiles registered 8% YoY growth. The company is in the process of ramping up the newly commissioned PTFE & R32 plants. Three new agrochem products have been launched in Q3FY24 while two more are expected to be ramped up in Q4FY24. No major capex has been shelved off as a result of the slowdown in demand although some deferment may happen. While the company appears strong in terms of product launches and growth, it is trading at 30x FY26 EPS and 17.4x FY26 EV/EBITDA.

Outlook

Due to continued concerns on agrochemical demand in the near-term and lack of recovery in ref gas prices, we downgrade to Reduce rating on the stock with SOTP based target price of Rs2,127.

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SRF - 3112024 - prabhu