SRF - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.4

📊 Core Financial Analysis

Revenue & Profitability

PAT Decline: ₹432 Cr vs ₹526 Cr in previous quarter — a 17.8% drop, signaling margin pressure or demand slowdown.

EPS: ₹48.3 — decent, but not compelling given the high valuation.

ROE (10.4%) & ROCE (12.3%): Moderate returns, below industry leaders. Indicates average capital efficiency.

Margins & Cash Flow

Margins appear compressed given the PAT drop and high P/E.

No direct cash flow data provided, but declining profits suggest tightening operational cash.

Debt & Leverage

Debt-to-Equity: 0.37 — healthy and manageable. SRF is not over-leveraged, which is a positive.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 64.4 Extremely high vs industry PE of 27.2 — overvalued

P/B Ratio ~7.3 Premium valuation, not justified by ROE

PEG Ratio -5.02 Negative PEG implies declining earnings growth

Intrinsic Value Likely < ₹2,500 Based on earnings and growth, current price exceeds fair value

🏢 Business Model & Competitive Edge

Diversified chemicals and packaging business with global exposure.

Strong legacy and scale, but recent quarters show profit volatility.

Competitive advantage lies in specialty chemicals, but margin pressures and global headwinds are impacting performance.

📉 Technical & Sentiment Indicators

RSI: 46.6 — neutral zone, not oversold.

MACD: -6.23 — bearish momentum.

Volume below average — weak buying interest.

DMA 50 ≈ Current Price — consolidation zone.

FII holding down, DII slightly up — mixed institutional sentiment.

🧠 Investment Guidance

🔍 Entry Zone (If Undervalued)

Ideal Buy Range: ₹2,500–₹2,700

Closer to intrinsic value and 200 DMA.

Offers better margin of safety.

📈 Long-Term Holding View

Hold only if bought below ₹2,700.

Monitor profit recovery and margin trends.

Reassess if ROE/ROCE improves and valuation moderates.

Would you like a comparison with peers like PI Industries or Deepak Nitrite to see how SRF stacks up?

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