SRF share price was up by 10.85% to Rs 2,606.15 in early trade on Thursday, January 9, 2025. By 10:00 AM IST, SRF stock price today had extended its three-day gain. It is outperforming the benchmark Nifty, which is up 54.5 points at Rs 23,634.45.
The stock price was Rs 2,350.90 in the last session. The 52-week high for SRF's shares stands at Rs 2,697.45, and the 52-week low is at Rs 2,088.55. The company currently holds a market capitalization of Rs 78,479.95 crore.
The stock has surged amid reports that pricing pressures are going to rebound for some specialty chemical companies.
According to Axis Securities, recent trends in exports and pricing data indicate that most specialty chemical companies are facing pricing pressures. However, there are signs of recovery in specific markets. This has made investors optimistic about SRF's core businesses.
JM Financial, among other brokerage firms, has reflected the same optimism, saying SRF will report a positive trend in the upcoming quarter. EBITDA of SRF for Q3 FY25 is forecasted to increase by 6% year-on-year, with specialty chemicals recovering well. The company's chemical sales are likely to grow 3% year-on-year, with the company's EBIT margin rising to 19% from 18.1% in Q2 FY25.
The overall optimistic outlook aside, some analysts see potential challenges in the pipeline. Elara Capital has projected a 12% quarter-on-quarter deceleration in EBITDA at SRF with flat export demand and a 12% correction in realizations. The brokerage house highlighted the concern of oversupply in agrochemicals and refrigerants coming from China and exerting margin pressure.
Despite these challenges, the management at SRF remains optimistic about a recovery in export volumes and an uptick in domestic sales, especially in the Fluorochemicals Business.
The Fluorochemicals Business has consistently performed in the domestic market and remains a significant growth driver for SRF. The company has a better perspective for the remainder of the year as export volumes build up and the country's domestic season starts.
As far as the agrochemicals business line is concerned, SRF reports good growth in generic agrochemicals. It expects continuing growth in that segment. Meanwhile, the pharma business for the company would be expanding its presence. There is an anticipation that it will derive 25% of sales from pharmaceutical intermediates in five years.
SRF stock has seen growth in chemicals and agrochemicals, and its footprint in material sciences is building, specifically through its fluoropolymers division. These are expected to benefit from a growing demand from industries such as battery chemicals, semiconductors, and renewable energy.
In addition, SRF is also setting up the capacity for refrigerant gases, with a plan of setting up a 10,000 TPA capacity for fourth-generation refrigerants (HFO). This is also slated to support the company's future growth in sunrise sectors such as battery chemicals, electronics, and renewable energy.
While some short-term hurdles are likely, analysts remain upbeat about SRF's long-term growth prospects. Nuvama Wealth Management has maintained a ‘BUY’ rating on SRF with a target price of Rs 2,672. The firm emphasized its strong market position and growth potential. SRF is well-placed to exploit emerging trends in the global market with its diversified portfolio across chemicals, agrochemicals, and material sciences.
SRF’s share price surge reflects investor optimism driven by positive growth prospects, particularly in specialty chemicals and material sciences. While short-term challenges remain, the company’s long-term outlook appears strong, positioning it well for sustained growth.