SRF's moat lies in its technological innovation and advancement to meet evolving customer needs and maintain a leadership position. Its R&D spending has increased at ~11% CAGR over the last decade, with Rs 1.5 billion spent in FY25 — around 5.4% of Ebitda.
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Motilal Oswal Report
Considering a healthy recovery in FY25, SRF Ltd. aims to maintain the growth trajectory in FY26, driven by strategic investments and capacity expansions. The company targets to improve the performance of all segments, focusing on market recovery, innovation, and operational efficiencies to sustain profitability.
Chemicals business (fluorochemicals and specialty chemicals) is expected to grow 20% YoY in FY26E, led by the ramp-up of commissioned facilities. Its packaging business is likely to continue its growth trajectory, led by the ramp-up in sales of high-impact VAPs and aluminum foils. TTB is expected to witness flat growth in FY26E.
We expect SRF to clock a CAGR of 12%/15%/16% in revenue /Ebitda /adjusted PAT over FY25-27.
We reiterate our Buy rating on the stock with our SoTP-based target price of Rs 3,700, owing to its rich valuations.
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