Hold SRF; target of Rs 2349: Prabhudas Lilladher

Moneycontrol • 9 days ago

Original source

Key Investment Pillars

  • Strong Fluorochemicals performance: Higher volumes and improved realizations are driving growth in this segment, with management expecting Chemicals business growth to be at the upper end of its 20% guidance for FY27.
  • Growth in Performance Films & Foil business: This segment reported 51% YoY and 5% QoQ revenue growth, supported by stronger demand across geographies and higher aluminium foil exports to Europe.
  • New capex announcement: SRF announced an investment of INR6bn to establish a 12,000mtpa aluminium foil manufacturing facility, with Phase I expected to be commissioned by Sep'28, catering to battery applications.
  • Technical Textiles growth: This segment delivered 25% YoY revenue growth, supported by exports and new customer additions in the belting fabric segment.

Thesis Validation Checklist

To validate the 'Hold' thesis, investors should watch for: (1) volume recovery in Specialty Chemicals, (2) margin expansion in the Performance Films & Foil business, (3) progress on the new aluminium foil project, and (4) stronger demand for Technical Textiles. These signals will indicate whether the company's growth drivers are on track and if the 'Hold' rating is justified.