Sharekhan Recommends To Buy This Manufacturer Stock For Good Returns

Target Price

The Current Market Price (CMP) of SRF Ltd. is Rs. 2161. The brokerage firm, Sharekhan Recommends has estimated a Target Price for the stock at Rs. 2430. Hence the stock is expected to give a 12.44% return, in a Target Period of 1 year.

Company performance

SRF Ltd.'s EBITDA stood at Rs. 2145 crore in FY 21, while it is expected to grow to Rs. 2510 crore in FY 22. The adjusted PAT stood at Rs. 1198 crore in FY 21, while it is expected to grow at Rs. 1438 crore in FY 22. Within the chemical segment, the management is expecting the specialty chemical business to sustain 15-20% revenue growth annually over the next 3-5 years and the outlook for fluorochemicals business on the margin/volume front has improved considerably with the recent increase in HFC refrigerant price.

Comments by Sharekhan

Maintaining buy rating Sharekhan said, "Anti-dumping duty by the US on imports of HFCs from China has led to the better realization and improved margin outlook for refrigerants business in near to medium term...Recent improvement in TTB segment's realization/margin (given shut down of capacities in China) is expected to sustain and has room for further improvement as realization remains below import parity prices." The firm thinks that high growth in the chemical business supported by high Capex intensity, sustained strong margin for the technical textiles business, and focus on value-added products (VAP) in the packaging film business would drive strong business.

About the company

SRF is a chemical-based manufacturer, who is involved with technical textile, coated fabrics, laminated fabrics, fluorochemicals, specialty chemicals, and packaging films businesses. They have a presence in India, Thailand, South Africa, and Hungary; they serve customers in over 75 countries globally.

Disclaimer

The above stock was picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.