SRF Ltd. share price target

SRF Ltd. (SRF) consolidated Q3FY19 sales at INR 1964 cr came ~6% above our estimates and ~41% higher y-o-y driven by better than expected growth across all segments.

5 February 2019 SRFs revenue increased 40.6% YoY to gross margin contracted 480bp YoY to 42.6%. EBITDA grew 43% YoY to Revenue grew by 41.3% YoY, with the margin expanding by 110bp YoY. Adj. PAT grew by 44.7% YoY. EBIT margin contracted by 200bp (to 14.9%) in Technical textiles, by 510bp (to 13.1%) in Chemicals, by 210bp (to 12.5%) in Packaging film and by 130bp (to 9.3%) in Others segment. The all-round margin contraction was largely driven by (a) raw material price volatility (higher fluorspar price in Chemicals and inventory loss of INR200m in Packaging film) and (b) fixed cost due to capex capitalization in Specialty chemicals.

3 November 2018 SRFs revenue increased 48.9% YoY Revenue grew 42% YoY to INR36,566m. EBITDA increased 56% YoY to INR6,440, with the margin expanding 160bp YoY. Adj. PAT grew 49% YoY to INR2,992m. For 2HFY19, we expect revenue growth of 31% YoY, with margin expansion of 130bp YoY. After robust growth in Chemicals (+33.8%) and Packaging (+52.3%) in the previous quarter, SRF took further strides with growth of 56.6% and 69.5% YoY, respectively, in 2QFY19. Technical Textiles business, too, recovered with growth of 30.3% YoY in 2QFY19 (after de-growth of 1.2% in 1QFY19). With growth drivers for all segments in place and Specialty Chemicals likely to revive, SRF is in a sweet spot for a stellar 2HFY19, in our view.

In our view, favorable sowing conditions, a decline in closing stocks of key crops and a run-up in global commodity prices are expected to drive a turn around in Specialty Chemicals business. Biaxially-oriented polyethylene terephthalate (BoPET) business is enjoying favorable demand-supply dynamics, with most markets facing supply shortage are inclined to pay premiums. This should more than offset the pressure in biaxially oriented polypropylene (BOPP) business.

SRF Ltd's (SRF) consolidated Q1FY19 sales at INR 1741 cr came ~11% above our estimates

Revenue increased by 8.04% to Rs. 1717.79 Cr in Q1FY19 when compared to the previous quarter. SRF Ltd Q1FY19 results Comment

8 August 2018 SRFs revenue grew 34.6% YoY to INR17,413m (est. of INR15,248m) in 1QFY19, led by higher-than-expected growth of 52.3% YoY in Packaging film business, followed by growth of 33.8% YoY in Chemicals & polymers business. EBITDA margin expanded 170bp YoY to 17.9% (est. EBITDA grew 48% YoY to INR3,112m (est. Adj. PAT grew 29% YoY to INR1,338m (est. INR1,196m), despite a higher tax rate of 26.6% (v/s 18% in 1QFY18) and higher interest cost of INR443m (v/s INR271m in 1QFY18).

SRF clocked healthy consolidated revenue growth of ~22% YoY in Q4FY18 underpinned by robust performance of packaging and chemicals businesses. EBITDA grew by 26% YoY mainly driven by better performance across segments. EBIT margin of packaging, chemicals & textiles businesses rose by...

SRF is the market leader in fluorine chemistry, technical textiles, refrigerant gases besides being a preferred supplier of other fluorochemicals products and polyester films, in India.

SRF Ltd: Q3FY18 Result Update : We expect the specialty chemical business to rebound in FY19 which coupled with improved volumes in the refrigerants business is likely to drive...