SRF - Looking Beyond Near Term Weakness: IDBI Capital

IDBI Capital Report

We met the management of SRF Ltd. for an update on the company developments and to garner finer insights into the current business scenario.

SRF is seeing continuous queries for new projects and no slowdown has been seen on this aspect. SRF’s product offerings majorly in the form of specialty chemicals and refrigerant gases are cost competitive even in the wake of intense pricing pressures emanating from Chinese dumping.

Management mentioned that these sort of pricing trends are not sustainable and this along with the inventory destocking situation should normalize in six-18 months.

Once the situation normalises, SRF is well poised to capitalise on the robust growth in the chemical segment. We maintain our 'Buy' rating on SRF with a SOTP target of Rs 2,913.

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