The target price for SRF is set at ₹3,250, with the current market price standing at ₹2,854.00. Analysts are reiterating their buy recommendation for the stock with a revised Sum of the Parts (SoTP) based target price.
There is optimism surrounding SRF as it is believed that the worst is now behind all of its business segments. The company has been experiencing strong volume and pricing in the domestic market for refrigerant gases, with global prices increasing due to various factors such as the rise in Chinese refrigerant gas prices, supply constraints, and a shift towards lower Global Warming Potential (GWP) gases by Original Equipment Manufacturers (OEMs).
The fluorospecialty business is showing signs of improvement in the first half of the calendar year 2025, while the Packaging Films business is expected to see pricing and margins improve over the next few years. Additionally, the specialty chemicals segment is anticipated to pick up gradually, supported by the stabilization of existing products and the introduction of newer products, particularly Active Ingredients.
SRF is well-positioned to capitalize on the turnaround in the agricultural chemicals cycle and the improving global refrigerant prices, given its robust capex plans in the specialty chemicals segment and a diverse portfolio of refrigerant gases.
Looking ahead, the company is likely to benefit from the firming up of refrigerant gas prices globally, driven by price hikes in China and regulatory cuts in certain regions. Moreover, the packaging films business is expected to witness improvement as the demand-supply gap narrows in both BOPP and BOPET segments over the next few years.
In conclusion, SRF is in a prime position to leverage the positive industry dynamics and drive growth across its various business segments in the coming years.
