⚠ 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 | 76,184 Cr. | Current Price | 2,571 ₹ | High / Low | 3,325 ₹ |
| Stock P/E | 42.3 | Book Value | 406 ₹ | Dividend Yield | 0.35 % | ROCE | 13.7 % |
| ROE | 11.5 % | Face Value | 10.0 ₹ | DMA 50 | 2,724 ₹ | DMA 200 | 2,850 ₹ |
| Chg in FII Hold | -0.50 % | Chg in DII Hold | 0.65 % | PAT Qtr | 528 Cr. | PAT Prev Qtr | 363 Cr. |
| RSI | 45.6 | MACD | -74.9 | Volume | 10,15,619 | Avg Vol 1Wk | 9,62,562 |
| Low price | 2,314 ₹ | High price | 3,325 ₹ | PEG Ratio | -7.58 | Debt to equity | 0.25 |
| 52w Index | 25.4 % | Qtr Profit Var | 88.5 % | EPS | 58.4 ₹ | Industry PE | 16.5 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT rose from ₹363 Cr. to ₹528 Cr. (88.5% growth).
- Margins: ROE at 11.5% and ROCE at 13.7% → moderate efficiency.
- Debt: Debt-to-equity ratio of 0.25 → low leverage, healthy balance sheet.
- Cash Flow: Stable, supported by diversified operations.
- Return Metrics: EPS at ₹58.4, strong earnings visibility.
💹 Valuation Indicators
- P/E Ratio: 42.3 vs Industry PE of 16.5 → significantly overvalued.
- P/B Ratio: Price ₹2,571 / Book Value ₹406 ≈ 6.33.
- PEG Ratio: -7.58 → negative, reflecting weak growth relative to valuation.
- Intrinsic Value: Current valuation stretched, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Diversified operations across chemicals, packaging films, and technical textiles.
- Strong R&D capabilities and global presence provide competitive edge.
- Low debt enhances financial flexibility.
- Challenges include cyclical demand in chemicals and margin pressures.
📈 Entry Zone Recommendation
- Technicals: RSI at 45.6 (neutral), MACD negative, price below 50DMA (2,724) and 200DMA (2,850).
- Entry Zone: Attractive accumulation near ₹2,350–2,450 for long-term investors.
- Holding Guidance: Suitable for long-term holding given diversified business model, but valuations remain high.
✅ Positive
- Strong quarterly profit growth (88.5%).
- Diversified business segments reduce risk.
- Low debt-to-equity ratio (0.25).
- DII holdings increased (+0.65%).
⚠️ Limitation
- High P/E (42.3) compared to industry average (16.5).
- Negative PEG ratio indicates weak growth outlook relative to valuation.
- Dividend yield low at 0.35%.
📉 Company Negative News
- Stock corrected from ₹3,325 to ₹2,571.
- FII holdings decreased (-0.50%).
- Technical indicators (MACD negative) show bearish sentiment.
📈 Company Positive News
- Quarterly PAT surged to ₹528 Cr.
- DII confidence increased (+0.65%).
- Strong global presence and diversified portfolio support resilience.
🌐 Industry
- Chemicals and packaging films industry is cyclical but has long-term demand drivers.
- Industry PE at 16.5 indicates sector trades at lower valuations compared to SRF.
- Global demand for specialty chemicals and packaging supports growth potential.
🔎 Conclusion
- SRF shows strong profit growth and financial stability with low debt.
- Valuations are stretched, limiting near-term upside.
- Best considered as a long-term hold with entry near ₹2,350–2,450 for margin of safety.