Q2 FY26 was mixed bag for SRF; weakness in packaging neutralized the strength in chemicals. Consolidated revenue at Rs 36.4 billion (+6% YoY, -5% QoQ) was 5% lower than estimated. Ebitda was broadly in line at Rs 7.7 billion (+44% YoY, -7% QoQ) but adjusted profit after tax at Rs 3.9 billion (+93% YoY, -10% QoQ) missed estimate by 9%.
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Systematix Report
We have trimmed our FY26E/FY27E revenue for SRF Ltd. by 6% each. Ebitda margin forecast has been cut by 27bps/8bps during this period, respectively, to factor in the weakness in the packaging segment. As a result, Ebitda estimates have been cut by 7.7%/6.7% and EPS by 7.6%/6.3%, respectively.
Our revised SOTP-based target of Rs 3,295 (Rs 3,400 earlier) implies ~36x FY27E P/E.
We maintain Hold on limited upside potential.
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