Multibagger Alert: This chemical intermediate manufacturer has given returns of 109% in the past year!

Multibagger Alert: This chemical intermediate manufacturer has given returns of 109% in the past year!

by 5paisa Research Team Last Updated: 2022-02-15T15:47:20+05:30

Underpinned by the strong demand outlook for key products and sizeable Capex pipeline, the price of the company has seen a run-up over the past year.

Chemical-based multi-business entity, SRF Limited has given investors stellar returns of 108.59% over the last year. The share price of the company stood at Rs 1123.88 on February 12, 2021, and since then, it has more than doubled investor wealth.

SRF is a multi-business entity and one of the leading manufacturers of fluorochemicals, speciality chemicals, technical textiles and packaging films. The company has 11 manufacturing plants in India, two in Thailand, one in South Africa, and an upcoming facility in Hungary. It exports to more than 75 countries.

In Q3, SRF Limited posted a strong beat on the top-line and bottom-line, underpinned by robust performance by the chemicals business (CB) and packaging films business (PFB). Its consolidated revenues grew to Rs 3314.14 crore, up by 55.64% YoY from Rs 2129.43 crore in Q3FY21. On a sequential basis, the top-line was up by 17.75%. PBIDT (Ex OI) was reported at Rs 847.88 crore, up by 55.68% as compared to the year-ago period. PAT was reported at Rs 505.54 crore, up by 55.91% from Rs 324.25 crore in the same quarter for the previous fiscal year.

The strong long-term growth prospects of the speciality chemicals sector have driven the stock prices of domestic chemical players higher given the massive revenue opportunity from the perspective of import substitution, a potential increase in exports given a China Plus One strategy and favourable government policies.

Moreover, the management of the company sees promising growth opportunities in the agrochemical and API space. In the fluorochemical space, the company is focusing on ramping up utilisation levels in the recently commissioned HFC facilities and the demand traction here is expected to be strong. SRF has announced setting up a new pharma intermediate plant in Dahej for Rs 190 crore and a dedicated facility for agrochemical products for Rs 61 crore. Underpinned by the strong demand outlook for key products and sizeable Capex pipeline, the price of SRF has seen a run-up over the past year.

At 3 pm on Tuesday, the stock of SRF Ltd was trading at Rs 2500.35, up by 6.23% or Rs 146.60 per share on BSE. The 52-week high of the scrip is recorded at Rs 2,679 and the 52-week low at Rs 1,026.63 on the BSE.


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