⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SRF - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | SRF | Market Cap | 80,829 Cr. | Current Price | 2,726 ₹ | High / Low | 3,325 ₹ |
| Stock P/E | 44.9 | Book Value | 406 ₹ | Dividend Yield | 0.33 % | ROCE | 13.7 % |
| ROE | 11.5 % | Face Value | 10.0 ₹ | DMA 50 | 2,929 ₹ | DMA 200 | 2,913 ₹ |
| Chg in FII Hold | -0.50 % | Chg in DII Hold | 0.65 % | PAT Qtr | 528 Cr. | PAT Prev Qtr | 363 Cr. |
| RSI | 35.7 | MACD | -68.9 | Volume | 2,11,739 | Avg Vol 1Wk | 5,06,118 |
| Low price | 2,570 ₹ | High price | 3,325 ₹ | PEG Ratio | -8.05 | Debt to equity | 0.25 |
| 52w Index | 20.7 % | Qtr Profit Var | 88.5 % | EPS | 58.4 ₹ | Industry PE | 17.5 |
📊 Core Financials
- Quarterly PAT surged to 528 Cr from 363 Cr (+45%), showing strong sequential growth.
- ROE at 11.5% and ROCE at 13.7% indicate moderate efficiency in capital utilization.
- Debt-to-equity ratio at 0.25 reflects a healthy balance sheet with low leverage.
- Cash flows supported by diversified operations across chemicals, packaging films, and technical textiles.
💹 Valuation Indicators
- P/E ratio: 44.9, significantly higher than industry average of 17.5, suggesting overvaluation.
- P/B ratio: ~6.7 (2,726 ₹ / 406 ₹ book value), indicating premium pricing.
- PEG ratio: -8.05, negative due to inconsistent earnings growth, highlighting valuation concerns.
- Intrinsic value appears lower than current price, limited margin of safety.
🏢 Business Model & Competitive Advantage
- SRF operates in chemicals, packaging films, and technical textiles, offering diversified revenue streams.
- Competitive advantage lies in strong R&D, global presence, and leadership in specialty chemicals.
- Exposure to high-growth industries like refrigerants and packaging provides long-term potential.
📈 Entry Zone & Long-Term Guidance
- Entry zone: 2,570–2,650 ₹ range (near recent low and RSI at 35.7, close to oversold).
- Long-term holding viable for investors seeking exposure to specialty chemicals and packaging growth.
- Accumulation should be cautious due to stretched valuations and weak technical indicators.
Positive
- Strong quarterly PAT growth (+88.5% YoY).
- Diversified business model across chemicals, films, and textiles.
- Low debt-to-equity ratio (0.25), ensuring financial stability.
Limitation
- High P/E (44.9) compared to industry average (17.5).
- Negative PEG ratio (-8.05) indicates poor growth-adjusted valuation.
- Dividend yield at 0.33% is low, offering limited income returns.
Company Negative News
- Stock trading below 50 DMA (2,929 ₹) and 200 DMA (2,913 ₹), showing bearish trend.
- FII holdings decreased by 0.50%, reflecting reduced foreign investor confidence.
Company Positive News
- Quarterly PAT growth demonstrates strong operational performance.
- DII holdings increased by 0.65%, showing domestic institutional support.
Industry
- Industry PE at 17.5, much lower than SRF’s 44.9, highlighting sector undervaluation relative to SRF.
- Specialty chemicals and packaging sectors expected to grow steadily with rising demand.
Conclusion
- SRF is fundamentally strong with diversified operations and strong profit growth.
- Valuations remain stretched, making accumulation near 2,570–2,650 ₹ more attractive.
- Best suited for long-term investors seeking exposure to specialty chemicals and packaging, but caution advised due to high valuation multiples.
I can also prepare a side-by-side comparison of SRF with peers like Aarti Industries and Navin Fluorine to highlight relative valuation and profitability strengths. Would you like me to draft that?