SRF has given spectacular investors to its long-term investors. The stock has surged over 5,000 percent in the last 10 years. It has skyrocketed from ₹50 in April 2012 to currently trade at ₹2,622, up as much as 5,144 percent in this time.
An investment of ₹1 lakh in 2012 in this stock would have turned to ₹52.44 lakh currently. Just in the last 1 year, the stock has doubled investor money, logging gains of 136 percent in this period.
SRF Limited is a chemical-based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. The company’s business portfolio covers Fluorochemicals, Specialty Chemicals, Packaging Films, Technical Textiles, Coated and Laminated Fabrics.
It has a market capitalisation of over ₹78,000 crore. Despite the high returns in the past, analysts expect the company to continue to perform better. Domestic brokerage house ICICI Securities has initiated coverage on the stock with a 'buy' call and a target price of ₹3,065. 22 analysts polled by Mintgenie also have 'buy' call on the stock.
ICICI believes that the company is well poised to expand into newer and more complex areas (such as fluoro-chemicals) by leveraging on its strong pedigree. Going ahead, it expects strong incremental traction from existing customers.
It also highlighted that control over working capital along with better operational performance will improve FCF generation. Prudent capital allocation towards high RoCE generating businesses will improve return ratios further.
Meanwhile, Kotak also likes SRF in the specialty chemical space and believes any meaningful correction may provide good entry points.
“We believe fundamentals of specialty chemicals companies continue to be strong. Valuations may see some correction as CoE reverts closer to pre-Covid levels. Companies are better placed to handle the current increase in crude prices (last seen in FY2013-14) given presence in more downstream products, volume-led growth and improved competitiveness versus Chinese peers," it said.
In the December quarter, the company posted a 56 percent rise in its consolidated net profit at ₹506 crore versus ₹324 crore in the year-ago period. Revenue from operations also rose to ₹3,346 crore in the same quarter from ₹2,146 crore in the year-ago period.
It also revised its annual revenue growth outlook to around 37 percent.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.