Shares of SRF Ltd gained 3.00% to ₹2,851.00 on Tuesday despite Jefferies maintaining an ‘Underperform’ rating on the stock, citing concerns over high valuations and modest growth prospects. The brokerage has set a target price of ₹2,060, implying a significant downside from current levels.
Jefferies’ Outlook and Concerns
Management expects Specialty Chemicals to grow year-on-year in FY26, driven by the commercialization of new Agrochemical Active Ingredients (AIs) and Pharma Products. However, the segment is likely to face pricing pressure in export markets due to contract renegotiations, even as domestic refrigerant gas prices remain strong on sustained demand.
Jefferies remains cautious on SRF’s valuation, pointing out that the stock is currently trading at 47x forward P/E, which is over two standard deviations above its historical average. The brokerage sees the risk-reward profile as unfavourable, projecting a gradual recovery but maintaining FY26 and FY27 EPS estimates 16-17% below consensus expectations.
Stock Performance and Market Reaction
SRF’s stock jumped to ₹2,851.00, reflecting a 3% increase from its previous close of ₹2,768.05. The stock has traded in a day range of ₹2,795.75 – ₹2,854.85. The company’s market capitalization stands at ₹845.15 billion, with a P/E ratio of 73.66 and a dividend yield of 0.29%.
Investor Sentiment
Despite Jefferies’ cautious stance, investors appear to be focusing on the company’s long-term growth potential in specialty chemicals and industrial gases, driving buying interest in the stock.
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