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Investing.com - UBS has raised its price target on SRF (NSE:SRFL) Ltd (NS:SRF) to INR2,400 from INR2,200 while maintaining a Sell rating, citing strong performance in the company’s chemicals segment despite market optimism that may be overextended.
SRF’s chemicals segment reported approximately 24% year-over-year revenue growth, with margins improving to 27.3% compared to 20.7% in the same quarter last year. The company experienced steady improvement in the agrochemical sector, though pricing pressure persisted on certain products.
Management maintained its guidance of approximately 20% growth in specialty chemicals despite lower-than-usual demand for domestic refrigerants. The shortfall was offset by increased exports and positive price trends that contributed to overall growth in the segment.
SRF’s performance films and foil business showed healthy results, while the technical textiles segment reported softer performance. These factors combined led to overall revenue growth of approximately 10% year-over-year and EBITDA growth of 32% year-over-year.
UBS noted a gradually improving trend, particularly in the chemicals business, but expressed concern that the market is too optimistic about the growth outlook, with the stock trading at 28 times FY26 estimated EV/EBITDA.
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