Motilal Oswal neutral on SRF, target price: Rs 2680

Motilal Oswal Financial Services has neutral call on SRF with a target price of Rs 2680. The current market price of SRF is Rs 2564.2.

SRF, incorporated in the year 1970, is a Large Cap company (having a market cap of Rs 76075.95 Crore) operating in Diversified sector.

SRF key Products/Revenue Segments include Chemicals (Industrial), Packaging Film, Textiles, Others for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 3800.42 Crore, up 9.22 % from last quarter Total Income of Rs 3479.67 Crore and up 6.85 % from last year same quarter Total Income of Rs 3556.65 Crore. Company has reported net profit after tax of Rs 562.45 Crore in latest quarter.

The company’s top management includes Mr.Arun Bharat Ram, Ms.Bharti Gupta Ramola, Mr.Tejpreet S Chopra, Mr.Puneet Yadu Dalmia, Mr.Lakshman Lakshminarayan, Mr.Raj Kumar Jain, Mr.Yash Gupta, Mr.Pramod G Gujarathi, Mr.Kartik Bharat Ram, Mr.Ashish Bharat Ram, Mr.Vellayan Subbiah. Company has BSR & Co. LLP as its auditors. As on 31-03-2023, the company has a total of 30 Crore shares outstanding.

Investment Rationale
The brokerage increases its FY24 EBITDA estimates by 5%, on the back of better-than-expected margins in chemical business; however, it maintains its F25EEBITDA.

Furthermore, the brokerage reiterates its Neutral rating on the stock, owing to its rich valuation, which has been priced into the near-term upside.

Promoter/FII Holdings
Promoters held 50.53 per cent stake in the company as of 31-Mar-2023, while FIIs owned 18.52 per cent, DIIs 14.79 per cent.