Motilal Oswal Sees Upside in SRF Stock, Targets Rs 3400
SRF Delivers Strong 4QFY26 Performance
Motilal Oswal's latest research report highlights the strong performance of SRF in the fourth quarter of fiscal year 2026. The company's earnings before interest and taxes (EBIT) grew by a substantial 14% year-over-year, driven by significant increases in the EBIT of its key business segments. Specifically, the company's Chemicals business saw a 5% year-over-year jump, while the Performance Films and Foil (PFF) business experienced a 47% year-over-year growth. The Technical Textiles Business (TTB) was also a standout performer, with a 63% year-over-year increase in EBIT.
Despite facing challenges in the specialty chemicals segment due to the global environment, SRF was able to successfully redirect its business away from the Middle East without incurring any loss of volumes. This strategic move has likely contributed to the company's strong performance in the quarter.
Outlook and Recommendations
Motilal Oswal is optimistic about SRF's future prospects, projecting a compound annual growth rate (CAGR) of 15% for revenue, 21% for earnings before interest, taxes, depreciation, and amortization (EBITDA), and 24% for adjusted profit after tax (Adj. PAT) over the fiscal years 2026-2028. Based on this analysis, the research firm reiterates its BUY rating for the stock and values it on a sum-of-the-parts (SoTP) basis to arrive at a target price of INR3,400.
| Business Segment | 4QFY26 EBIT Growth (YoY) |
|---|---|
| Chemicals | 5% |
| Performance Films and Foil (PFF) | 47% |
| Technical Textiles Business (TTB) | 63% |
Investor Takeaway
Investors should consider buying SRF stock due to its healthy performance and positive outlook.
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