The IIFL Securities Report: Buy Srf - March 21

IIFL Securities issued a buy recommendation for SRF on March 21, with a target price of Rs 2,625, representing a potential upside of 4.2% from its current market price of Rs 2,519.95. The brokerage firm's positive outlook is attributed to the company's strong performance in its packaging films and chemicals businesses, which are expected to drive earnings growth going forward. SRF's consistent track record of innovation and its strategic expansion plans are also viewed favorably by IIFL Securities.

About Srf:

SRF Limited is an Indian multinational conglomerate based in Mumbai. It is engaged in the manufacture of industrial and specialty chemicals, technical textiles, packaging films, and fluorochemicals. The company operates 11 manufacturing plants in India and 8 overseas. SRF is one of the world's largest manufacturers of polytetrafluoroethylene (PTFE) and other fluoropolymers. It is also a leading producer of specialty chemicals, such as refrigerants, electronic grade chemicals, and surfactants. The company has a strong presence in the Indian and global markets.

52 Week Price Trend:

SRF has been trading within a wide range in the past 52 weeks, reaching a high of Rs 2636.65 and a low of Rs 2040. The stock's current price of Rs 2519.95 is closer to the upper end of this range, suggesting that there may be some upside potential left. However, investors should also be aware of the risks involved, as the stock has the potential to fall back towards its 52-week low if the market turns bearish.

Stratzy's MOST Analysis:

Based on Stratzy's MOST framework, SRF has been rated BBB, indicating Medium Fundamental Risk. This rating is derived from the evaluation of four key pillars: Management (Satisfactory), Outlook (Positive), Safety (Somewhat Conservative), and Trend (Improving). The overall score of BBB suggests that while SRF exhibits some weaknesses in certain areas, its overall fundamentals demonstrate a solid foundation and potential for growth.

Company's Fundamentals:

SRF Limited (NSE: SRF) is a leading manufacturer of specialty chemicals in India. Its financial ratios provide insights into its performance and valuation. The Stock PE ratio of 48.21 suggests that the company's shares are trading at 48.21 times its earnings per share, indicating a high valuation. The PB Ratio of 6.56 represents the company's market value being 6.56 times its book value, implying a premium compared to the industry average. Additionally, the Dividend Yield of only 0.3% reflects a low level of income distribution to shareholders. These ratios indicate that SRF is trading at a high valuation and has a limited yield, making it less attractive for income-oriented investors.

Fundamental and Technical information provided in this blog were last updated on 21 Mar, 2024

Disclaimer: The information and recommendations presented in this section, including any attached reports, are sourced from third-party providers through diverse channels. The views and opinions expressed within these materials belong solely to their respective creators. These views and opinions do not necessarily reflect the position of Stratzy Fintech Pvt Ltd. Stratzy explicitly disclaims any guarantees, express or implied, regarding the accuracy and reliability of the provided content. We strongly advise consulting with a licensed financial advisor before making any investment decisions based on this information. Remember, seeking independent financial advice is crucial.