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Investing.com - Citi has raised its price target on SRF (NSE:SRFL) Ltd (NS:SRF) to INR2,725.00 from INR2,375.00 while maintaining a Sell rating on the stock.
The price target adjustment follows SRF’s first-quarter EBITDA increase of 38% year-over-year to Rs8.3 billion, exceeding Citi’s estimate of Rs7.5 billion, despite a 13% quarter-over-quarter decline.
SRF reported revenues of Rs38.2 billion, representing a 10% year-over-year increase but a 12% quarter-over-quarter decrease, with EBITDA margin at 21.7% compared to 22.2% in the previous quarter and 17.4% in the same quarter last year.
The company’s outperformance against estimates was driven by higher-than-expected revenues in its Chemicals segment and better-than-anticipated EBIT margin in the packaging films business.
SRF stock has gained approximately 41% year-to-date and currently trades at around 25 times one-year forward EV/EBITDA, close to its five-year peak, which Citi suggests may already factor in potential upside from higher refrigerant gas prices.
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