Add SRF, target price Rs 2,452: HDFC Securities

HDFC Securities has an add call on SRF with a target price of Rs 2452. The current market price of SRF is Rs 2258.6. SRF., incorporated in 1970, is a largecap company with a market cap of Rs 66911.98 crore, operating in diversified sector.

SRF's key products/revenue segments include chemicals (industrial), other operating revenue, traded goods, export incentives for the year ending 31-Mar-2023.

Financials

For the quarter ended 30-09-2024, the company has reported a consolidated total income of Rs 3457.63 crore, down -.91% from last quarter's total income of Rs 3489.38 crore and up 7.83% from last year's same quarter's total income of Rs 3206.48 crore. The company has reported net profit after tax of Rs 201.42 crore in the latest quarter.

Investment Rationale
HDFC Securities retains an ADD rating on SRF, with a target price of Rs 2,452 on the back of (1) deployment of capex for high-growth speciality chemicals business over the next 3-4 years to tap opportunities emerging from the agrochemical and pharmaceutical industries and (2) a strong balance sheet. EBITDA/APAT were 10/20% below our estimates, owing to lower-than-expected revenue.

Promoter/FII Holdings
Promoters held 50.26 per cent stake in the company as of 30-Sep-2024, while FIIs owned 18.3 per cent, DIIs 17.76 per cent.