SRF Ltd. share price target

Revenue for the quarter of Rs. 3570 crore was down 7% y-o-y and up 17% q-o-q. Chemical/ Technical textiles/packaging films segments grew 30%/8%/2% q-o-q and -14%/2%/9% y-o-y. Growth was affected due to the weak external environment in specialty chemicals and fluorochemicals.

SRF reported another subdued operating performance in 4QFY24 with a
significant decline in operating profitability (EBIT down 34% YoY), due to the
continuing weakness in the Chemical/Packaging Film businesses (EBIT dipped
33%/19% YoY), which offset the strong performance in the Technical Textile
business (EBIT jumped 44% YoY).

Weak H1, recovery expected in H2FY24

SRF’s Q2FY24 print for its chemical business (EBIT down 32.8% YoY) was below our expectations – hurt by lower sales in ref-gas and weakness in specialty sales from destocking. Despite this, SRF expects some growth in specialty chemicals revenue for FY24 and anticipates revival in ref-gas revenue in H2FY24E, as it has started to contract volumes in US for CY24 HFC quota.