Last Updated : Jun 09, 2020 01:45 PM IST | Source: Moneycontrol.com

Buy SRF; target of Rs 4244: Motilal Oswal

Motilal Oswal is bullish on SRF has recommended buy rating on the stock with a target price of Rs 4244 in its research report dated June 06, 2020.

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Motilal Oswal 's research report on SRF

4QFY20 performance of SRF was impacted due to the COVID-19 pandemic and the auto sector slowdown, which in turn impacted the Technical Textiles and Refrigerant segments. However, strong margin expansion in the Packaging segment led to 4% EBITDA growth despite revenue decline of 4%. We have cut PAT estimates by 21%/4% for FY21/22E due to (a) lower demand for refrigerants on the slowdown in auto/white goods, and (b) the technical textiles business getting affected due to the auto slowdown.

Outlook

Also, increase in replacement demand for the auto sector (when normalcy is achieved) should boost performance of technical textiles/refrigerants. Factoring in the same, we have cut our PAT estimates by 21%/4% for FY21/22E. We value SRF on an SOTP basis to arrive at a target price of INR4,244. Maintain Buy.

For all recommendations report, click here

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