Buy SRF; target of Rs 3195: YES Securities

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26 Aug, 2025 12:21

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YES Securities' research report on SRF

SRF’s 3QFY23 Ebitda at Rs 8.3bn (-5% YoY; +8% QoQ), stood in-line with our and street estimates, with broader earning trends in-line with expectations. In the 9M period the operating earnings have grown by 25% YoY, driven by CB segment. Over 3QFY23, CB revenue at Rs 17.6bn registered a growth of 23% YoY, driven by demand traction for both specialty chemicals and fluorochemicals, helping offset 6% YoY lower PFB revenue at Rs 12bn and 21% YoY lower TTB revenue at Rs 4.3bn. While weaker demand for nylon tyre chord fabric impacted TTB revenues; start of new BOPET & BOPP lines in India and globally led to drop in PFB revenues. Continued investment towards capacity addition in CB, along with introduction of new product lines in specialty chemicals and fluoropolymers are likely to maintain earnings growth CAGR of ~ 20% for SRF. Maintain BUY.

Outlook

We maintain BUY on SRF with a Mar’24 TP of Rs 3195/sh. Our DCF based target price implies a target multiple of 35x FY25e, as against 23x the stock is currently trading at.

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SRF - 01 -01-2023 - yes