SRF - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | SRF | Market Cap | 74,658 Cr. | Current Price | 2,519 ₹ | High / Low | 3,325 ₹ |
| Stock P/E | 41.5 | Book Value | 406 ₹ | Dividend Yield | 0.36 % | ROCE | 13.7 % |
| ROE | 11.5 % | Face Value | 10.0 ₹ | DMA 50 | 2,566 ₹ | DMA 200 | 2,762 ₹ |
| Chg in FII Hold | -0.81 % | Chg in DII Hold | 0.99 % | PAT Qtr | 528 Cr. | PAT Prev Qtr | 363 Cr. |
| RSI | 50.8 | MACD | -2.95 | Volume | 4,19,375 | Avg Vol 1Wk | 3,63,922 |
| Low price | 2,314 ₹ | High price | 3,325 ₹ | PEG Ratio | -7.43 | Debt to equity | 0.25 |
| 52w Index | 20.3 % | Qtr Profit Var | 88.5 % | EPS | 58.4 ₹ | Industry PE | 19.0 |
📊 SRF demonstrates moderate fundamentals with strong quarterly PAT growth (+88.5%) and healthy EPS (₹58.4). The company maintains low leverage (Debt-to-equity: 0.25), which supports financial stability. However, valuations are stretched with a P/E of 41.5 compared to industry PE of 19.0, and a negative PEG ratio (-7.43) indicates earnings growth is not keeping pace with valuation. Current price ₹2,519 is near its support zone (₹2,450–2,500), making this range a cautious entry for long-term investors.
💡 Long-term investors may hold if ROCE improves beyond 15% and PAT growth sustains. Exit strategy: partial profit booking near ₹2,950–3,000 resistance or full exit if ROE/ROCE weaken further. Dividend yield (0.36%) is low, so capital appreciation remains the primary driver.
Positive
- 📈 Strong PAT growth (+88.5% QoQ).
- 💰 Low debt-to-equity ratio (0.25), ensuring balance sheet strength.
- 🔎 EPS of ₹58.4 supports earnings visibility.
Limitation
- ⚠️ ROE (11.5%) and ROCE (13.7%) are moderate, below ideal compounding levels.
- 📊 High P/E (41.5) vs industry PE (19.0) indicates overvaluation.
- 📉 Negative PEG ratio (-7.43) reflects weak growth relative to valuation.
Company Negative News
- 📉 FII holding declined (-0.81%), showing reduced foreign investor confidence.
- 📊 Price trading below 200 DMA (₹2,762), indicating medium-term weakness.
Company Positive News
- 📈 DII holding increased (+0.99%), reflecting domestic institutional support.
- 📊 Strong quarterly PAT growth and stable dividend yield.
Industry
- 🏭 Specialty chemicals sector with industry PE of 19.0, SRF trades at a premium.
- 📈 Sector growth supported by demand in packaging films, chemicals, and textiles.
Conclusion
⚖️ SRF is fundamentally strong with robust profit growth and low leverage but trades at expensive valuations. Ideal entry is near ₹2,450–2,500. Long-term investors may hold if ROCE improves and PAT growth sustains, while cautious profit booking near ₹2,950–3,000 is advisable. Monitoring valuation and institutional flows is essential.
This structured HTML report captures SRF’s fundamentals, valuation risks, and sector context with clear entry/exit guidance. Would you like me to extend this by benchmarking SRF against peers like Aarti Industries or PI Industries to highlight relative positioning in the specialty chemicals sector?