Buy SRF, target price Rs 3,115: JM Financial

JM Financial has a buy call on SRF with a target price of Rs 3115. The current market price of SRF is Rs 2764.15. Time period given by the analyst is a year when SRF price can reach the defined target.
SRF, incorporated in the year 1970, is a Large Cap company with a market cap of Rs 84599.65 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 31-12-2024, the company has reported a Consolidated Total Income of Rs 3530.95 crore, up 2.12% from last quarter Total Income of Rs 3457.63 crore and up 14.95% from last year same quarter Total Income of Rs 3071.79 crore. The company has reported net profit after tax of Rs 271.08 crore in the latest quarter.

The company's top management includes Mr.Arun Bharat Ram, Ms.Ira Gupta, Mr.Raj Kumar Jain, Mr.Yash Gupta, Mr.Puneet Yadu Dalmia, Ms.Bharti Gupta Ramola, Mr.Vellayan Subbiah, Mr.Pramod G Gujarathi, Mr.Kartik Bharat Ram, Mr.Ashish Bharat Ram, Mr.Vineet Agarwal. Company has BSR & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 30 Crore shares outstanding.

Investment Rationale
The SRF management believes that there will be positive demand traction for its PTFE grades in FY26. It has received product approvals from domestic and international customers for two specialty and one commodity grades, which it believes will drive volume pick-up in FY26. On packaging films, it indicated that margins were likely to be similar or better than those reported over the last 2-3 quarters with some positive traction from aluminium foil ramp-up. JM Financial's estimates are unchanged, and they expect ~30%/50% EBITDA/EPS CAGR over FY25E-27E. The brokerage maintains a BUY with an unchanged SoTP-based Mar?26 target price of Rs 3,115 as we see multiple positives lying ahead.

Promoter/FII Holdings
Promoters held 50.26 per cent stake in the company as of 31-Dec-2024, while FIIs owned 18.37 per cent, DIIs 17.77 per cent.