SRF - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.4

📊 Core Financials Breakdown

Revenue & Profit Trends

FY24 revenue declined to ₹13,139 Cr from ₹14,870 Cr in FY23

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Quarterly PAT dropped from ₹513 Cr to ₹397 Cr, signaling margin compression.

EPS fell to ₹47.7, down from ₹63.75 in FY22

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Profitability Metrics

ROE at 11.5% and ROCE at 13.7% are decent but not industry-leading.

Net Profit Margin slipped to ~10.2%, down from 15.2%

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Operating Profit Margin fell to 20% from 24%

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Debt & Liquidity

Debt-to-equity ratio is low at 0.29, indicating strong balance sheet health.

Rising expenses and depreciation have impacted cash flows

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📉 Valuation Indicators

Metric Value Insight

P/E Ratio 61.5 Significantly overvalued vs industry PE of 21.9

P/B Ratio ~7.5 Premium valuation

PEG Ratio -11.0 Negative due to declining earnings

Intrinsic Value ~₹2,500 Estimated below current price

SRF is trading at a steep valuation, pricing in high growth that hasn't materialized recently.

🏭 Business Model & Competitive Edge

Diversified Segments: Technical textiles, fluorochemicals, packaging films, and engineering plastics.

Global Footprint: Strong export presence, especially in specialty chemicals.

Innovation & Expansion: New agrochemical facility at Dahej boosts long-term potential

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Despite its strengths, recent earnings volatility and margin pressure raise short-term concerns.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹2,500–₹2,700

Near 200 DMA (₹2,864) and well below 52-week high (₹3,325)

RSI at 49.2 suggests neutral momentum

MACD negative, indicating short-term weakness

🧭 Long-Term Holding Guidance

Hold if Already Invested: Quality business with long-term potential.

Caution for New Investors: Wait for valuation to cool or earnings to stabilize.

Watchlist Triggers

Margin recovery

EPS growth

Institutional buying trends

SRF remains fundamentally sound but is currently priced for perfection. A patient entry strategy could yield better risk-adjusted returns.

Let me know if you'd like a peer comparison or technical chart to round out the view.

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aliceblueonline.com

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stockanalysis.com

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