Hold SRF; target of Rs 2698: Prabhudas Lilladher

Prabhudas Lilladher's research report on SRF

We upgrade our rating to ‘HOLD’ as we anticipate sustained strength in refrigerants demand and pricing, along with visible signs of improvement in the agrochemical segment. SRF (SRF IN) reported consolidated revenue of Rs34.9bn, reflecting a 14.4% YoY and 2% QoQ increase. The chemicals segment grew 7% YoY and 10% QoQ, driven by record-high quarterly sales in specialty and fluorochemicals, with newly launched products gaining traction. The agrochemical segment has also begun to show improvement, though certain intermediates continue to face competition from China. In the packaging films business, BOPP witnessed demand growth, while BOPET prices and demand remained stable, leading to a 27% YoY revenue increase and a 240bps margin expansion. However, lower demand and an influx of low-cost imports from China resulted in a subdued performance for the technical textiles segment, particularly in belting fabrics.

Outlook

At a valuation of 53x FY27 EPS, we upgrade the stock to “Hold,” with a target price of Rs2,698, based on a sum-ofthe-parts (SOTP) valuation approach.

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SRF - 31012025 - prabhu