Citi has maintained a Sell rating on SRF Ltd, with a target price of ₹2,725, implying a 13.2% downside from the current market price of ₹3,141.
While the company’s Q1 EBITDA beat estimates by 11%, driven by stronger-than-expected performance in the chemicals and packaging films segments, Citi flagged caution due to underlying concerns in the topline and future outlook.
Notably, Q1 revenue fell 12% sequentially, even as it grew 10% year-on-year. Citi believes this softening may continue, citing downside risks to consensus estimates arising from Chinese pricing pressure and delays in key product commercialisation.
The brokerage remains wary of margin sustainability in the near term and expects muted sentiment unless there is clarity on growth revival in the specialty chemical pipeline.
Disclaimer: The views and recommendations expressed in this article are those of Citi and do not represent the views of this publication. Investors are advised to consult their financial advisor before making any investment decisions.
