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    Diksha D Jadhav in Stock Market Update

    20-Sep-2022 12:01 PM


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    This multibagger's stock has gone from Rs 1 lakh to Rs 60 lakh in 10 years

    The Indian stock market has produced many gems that have helped investors achieve financial freedom. SRF Chemical Company is one of them. The company's stock has risen 5,805% over the past 10 years. The certificate was worth Rs 2,682.05 on September 19, 2022 from Rs 45.42 on September 18, 2012. This means that an investment of Rs 1 lakh in SRF in 2022 would have been more than Rs 59 lakh now.

    Market watchers remain bullish on SRF even though it is high, pointing to a capital expenditure on chemicals of Rs 12,000-13,000 over the next 5 years, the company aims to increase chemical activity by 20% while maintaining RoCE of 20% and taking it. Investments in fluoropolymer at $150-200 million in the next 5 years, among others. Founded in 1970 after a spin-off from its parent company DCM, SRF is a diversified chemical company with interests in the production of refrigerant gases, packaging films, technical fabrics and specialty chemicals. It operates in four segments: Technical Textiles (17% of FY22 revenue), Chemicals (42%), Packaging Films (38%) and Others (3%). Over the years, the company's net sales rose to Rs 12,312 crore for the year ended March 31, 2022 from Rs 3,980.87 crore for the fiscal year 2012. Similarly, SRF's net profit rose to Rs 1888.92 crore against Rs 378.82 in the same period. This represents an annual increase of nearly 12% and 18% in net income, respectively, over the past 10 years.

    While maintaining a "Buy" call on SRF with a target price of Rs 3,000, brokerage firm JM Financial said the company remains at the forefront to capture growth in the fluorochemicals space. It says SRF could post 19.60% growth in net sales in FY23 and a return on equity of 23.40%.

    IIFL Securities is also positive on SRF with a target price of Rs 2,900. "The medium and long-term growth outlook is in line with our expectations. The increase in the strength of capital expenditure in chemicals bodes well, as it will lead to a strong overall market and profitability mix towards chemicals , over the next 5 years, thereby reducing overall exposure to cyclical/volatile businesses like art films and packaging,” IIFL Securities said in a report. The retailer added that SRF's deep expertise in fluorine-based chemicals and strong R&D capabilities are expected to be key factors driving the market-based specialty chemicals business to the next level. face.
    Source: BusinessToday