Up 5500% in 10 years! Brokerages see up to 34% upside in this multibagger

Shares of SRF limited have delivered over 5560 per cent return to its long-term investors in the last 10 years. Currently, the stock is down over 19 per cent from its 52-week high of Rs 2,864.35, hit on September 14, 2022.

Established in 1970, SRF Limited is a chemical-based multi-business entity engaged in the manufacturing of industrial and speciality intermediates. The company’s business portfolio covers Fluorochemicals, Specialty Chemicals, Packaging Films, Technical Textiles and Coated and Laminated Fabrics.

Brokerages have maintained their bullish stance on SRF despite the outperformance. Nirmal Bang, in its recent report, said  Specialty Chemicals (SCB) order pipeline remains solid and the growth momentum is expected to continue going forward as well.

"Apart from Chemicals, Fluoropolymers could emerge as a meaningful growth driver over the medium term and we expect major Capex announcements in the near future. While margin in the Packaging Films business is under pressure due to pressure in BOPET spreads, we believe that 75% of the company’s fair value is derived from the Chemicals business, which is exceeding expectations every quarter," it said.

"Overall, we are building in Revenue/EBITDA/APAT CAGR of 20%/23%/19% over FY22-25E. We maintain 'Buy' on SRF with an unchanged target price of Rs 3,100 with an unchanged earnings and valuation multiple," it added.

CITI has a 'Buy' call on SRF with a target price of Rs 3,125. The company continues to expand its chemical business offerings. However, the packaging films will likely remain a drag on overall performance, it said.

B&K Securities is also bullish on select stocks from the chemical space. On SRF, it has a 'Buy' rating with a target price of Rs 2,844.

B&K Securities said there were certain pockets in the chemical industry that may benefit from relative cost advantage in the near to medium-term and shift in manufacturing base or more outsourcing initiatives from European companies.

It believes that bulk chemicals and contract manufacturers would continue to be in the flavour.

At 10:30 hours, the stock was trading 1.23 per cent lower at Rs 2294.10. The market cap of the firm fell to Rs 68,002.82 crore on BSE.