SRF Q4 Review: Jefferies, Citi Research Hike Target Price After Q4 Performance Beats Estimates

Jefferies and Citi Research hiked SRF Ltd.'s target price after the company posted better-than-expected results in the fourth quarter. Growth in specialty chemicals and domestic demand in refining and gas prices supported this unexpected growth, according to brokerages.

SRF's management guided for 20% growth in specialty chemicals in the financial year 2026. However, visibility of such growth is clouded in the first half. Exports declined sharply in April on the month, suggesting a softness. Specialty chemicals witnessed a year-end recovery in FY25 volumes from seasonality and an increase in exports to US innovators, Jefferies said.

Low crop prices and elevated Chinese exports weigh on pricing in financial year 2026. Jefferies expects 18% growth for SRF. Jefferies raised the Ebitda estimates to 8% and 5%, respectively, for FY26 and FY27.

• Revenue up 21% at Rs 4,313 crore versus Rs 3,570 crore (Bloomberg estimate: Rs 4,059 crore).

• Ebitda up 37.6% at Rs 957 crore versus Rs 696 crore (Estimate: Rs 877. 7 crore)

• Ebitda margin at 22.2% versus 19.5% (Estimate: 21.6%)

• Net profit up 24.6% at Rs 526 crore versus Rs 422 crore (Estimate: Rs 467.7 crore)

SRF sees price pressure from Chinese competitors, which may result in price adjustments for various products, Citi Research said. Its valuations are at 27 times one-year forward EV/Ebitda at the higher end of its past five-year range of 15–27 times, which will likely maintain upside for the stock.