SRF shares delivered flat returns in a year; what should investors do?

Shares of specialty chemical maker SRF Ltd have delivered flat returns in the last one year. SRF stock is down 1.65% during the period.

SRF’s peers such as Gujarat Fluorochemicals shares are down 23%, Deepak Nitrite stock lost 1.05% and Tata Chemicals shares fell 10.45% in a year.

SRF stock is yet to report double digit returns for the period up to three years when it delivered 131% returns. In two years, the stock posted returns of 9.04%. It turned into a multibagger, rising 481% in the last five years.

Brokerage Nirmal Bang has assigned a target of Rs 2,637 per share. The brokerage is bullish on the company’s diverse business segments, strong operating efficiencies with a low working capital cycle and a broad distribution network that can drive wallet share gains. The calculation for target price has been arrived on the basis of SOTP (Sum of the Parts) valuation.

SRF shares were trading flat at Rs 2356.20 on Monday against the previous close of Rs 2349.40. Market cap of the firm stood at Rs 69,843 crore on BSE.

Morgan Stanley is overweight on the specialty chemical stock. It has set a target price of Rs 2634.

It has upgraded SRF from equalweight stance stating that, “SRF is poised to see consolidated volumes rise by 12% into F26, as it leverages expanded capacity in refrigerant gases, chloromethanes, PTFE as well as within its packaging segment.”

“Our bull case value is Rs 2,974 (Rs 2,565 earlier). Our bear case value rises to Rs 2,000 (from Rs 1,720),” said Morgan Stanley.

In terms of technicals, the relative strength index (RSI) of the SRF stock stands at 62.6, signaling it’s trading neither in the overbought not in the oversold zone. SRF shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day, 150 day and 200 day moving averages.

Total 2,953 shares of the firm changed hands amounting to a turnover of Rs 69.44 lakh on BSE. The share hit a 52-week high of Rs 2636.85 on May 9, 2023 and a 52-week low of Rs 2050 on July 25, 2023.

SRF reported a 37% decline in consolidated net profit at Rs 301 crore in Q2 against a net profit of Rs 481 crore in the year-ago period.

Revenue fell 14.8% year-on-year to Rs 3,177 crore in the July-September period against Rs 3,727 crore in the corresponding quarter of last year.

The Board cleared a project to set up a new facility in Gujarat’s Dahej. The new facility will be utilised in producing an agrochemical intermediate.


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