UBS has downgraded SRF Limited to “Sell,” slashing its target price from Rs 2,700 to Rs 2,100. The downgrade comes amid concerns over prolonged growth difficulties and the potential for further negative surprises.
UBS cites weak demand in the agricultural chemicals (ag chem) sector as a significant factor affecting SRF’s outlook. The firm expects China to gain a larger share of the ag chem market, posing additional challenges for SRF. Moreover, the demand and prices for refrigerant gases (ref gases) are anticipated to remain soft, further impacting SRF’s performance.
In light of these challenges, UBS has cut its earnings per share (EPS) estimates for SRF by 20% for the fiscal year 2025 (FY25E) and by 22% for the fiscal year 2026 (FY26E). The firm’s revised projections reflect a more cautious stance on SRF’s near-term prospects.
