This multibagger stock doubled shareholder's money in one year; more upside likely
It has surged from the Rs 1,055.91 mark to touch Rs 2,189.40. The large-cap stock has gained 107 per cent in the last one year.
- Dec 21, 2021,
- Updated Dec 21, 2021 2:29 PM IST
Shares of SRF Limited have doubled investors' money in the last 12 months. The stock rose 5 per cent to hit an intraday high of Rs 2,189.40 on the Bombay Stock Exchange (BSE).
It has surged from the Rs 1,055.91 mark to touch Rs 2,189.40. The large-cap stock has gained 107 per cent in the last one year.
With a market capitalisation of more than Rs 64,000 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Brokerage house Sharekhan mentioned that SRF’s management expects specialty chemical business to grow steadily by 15-20 per cent p.a. in 3-5 years, while the fluorochemicals business would benefit from higher refrigerant prices and huge demand from the US.
The earnings momentum of technical textiles should stay strong, while a rise in Biaxially oriented Polyethylene Terephthalate (BOPET) spreads bodes well for the near-term margin of the packaging film business. "Management is confident of growth across segments and focused to invest in high-growth specialty chemicals and thus we expect strong revenue/PAT CAGR of 19/23 per cent over FY21-24E along with RoE/RoCE of 20.4/22.2 per cent. A likely ADD by India on R-125 imports from China would further add to profitability while logistic issues (although limited impact currently) could be a near-term concern," it said. It further added that a 15 per cent correction in stock price from a 52-week high provides a good entry opportunity given superior earnings growth outlook while strong FCF and robust balance sheet provides scope for capex led growth. Favorable dynamics of Indian specialty chemicals space would support premium valuations "A superior earnings growth outlook, strong FCF generation and robust balance sheet keep us constructive on SRF and justified premium valuation. Hence, we maintain a Buy on SRF with an unchanged PT of Rs. 2,430. At CMP, the stock is trading at 36x its FY2023E EPS and 28.6x its FY2024E EPS," Sharekhan said in its research report. The company reported a 21 per cent year-on-year (YoY) rise in its net profit at Rs 382.45 crore for the quarter ended September 2021. Profit in the year-ago period stood at Rs 315 crore. Net Sales grew 35 per cent to Rs 2,838.97 crore in the September quarter compared to Rs 2,100.83 crore in the year-ago period. According to MarketsMojo, the company has declared positive results for the last 5 consecutive quarters and has high institutional holdings at 29.6 per cent. The stock is technically in a Mildly Bullish range. Multiple factors for the stock are Bullish like MACD, Bollinger Band and KST.
Shares of SRF Limited have doubled investors' money in the last 12 months. The stock rose 5 per cent to hit an intraday high of Rs 2,189.40 on the Bombay Stock Exchange (BSE).
It has surged from the Rs 1,055.91 mark to touch Rs 2,189.40. The large-cap stock has gained 107 per cent in the last one year.
With a market capitalisation of more than Rs 64,000 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Brokerage house Sharekhan mentioned that SRF’s management expects specialty chemical business to grow steadily by 15-20 per cent p.a. in 3-5 years, while the fluorochemicals business would benefit from higher refrigerant prices and huge demand from the US.
The earnings momentum of technical textiles should stay strong, while a rise in Biaxially oriented Polyethylene Terephthalate (BOPET) spreads bodes well for the near-term margin of the packaging film business. "Management is confident of growth across segments and focused to invest in high-growth specialty chemicals and thus we expect strong revenue/PAT CAGR of 19/23 per cent over FY21-24E along with RoE/RoCE of 20.4/22.2 per cent. A likely ADD by India on R-125 imports from China would further add to profitability while logistic issues (although limited impact currently) could be a near-term concern," it said. It further added that a 15 per cent correction in stock price from a 52-week high provides a good entry opportunity given superior earnings growth outlook while strong FCF and robust balance sheet provides scope for capex led growth. Favorable dynamics of Indian specialty chemicals space would support premium valuations "A superior earnings growth outlook, strong FCF generation and robust balance sheet keep us constructive on SRF and justified premium valuation. Hence, we maintain a Buy on SRF with an unchanged PT of Rs. 2,430. At CMP, the stock is trading at 36x its FY2023E EPS and 28.6x its FY2024E EPS," Sharekhan said in its research report. The company reported a 21 per cent year-on-year (YoY) rise in its net profit at Rs 382.45 crore for the quarter ended September 2021. Profit in the year-ago period stood at Rs 315 crore. Net Sales grew 35 per cent to Rs 2,838.97 crore in the September quarter compared to Rs 2,100.83 crore in the year-ago period. According to MarketsMojo, the company has declared positive results for the last 5 consecutive quarters and has high institutional holdings at 29.6 per cent. The stock is technically in a Mildly Bullish range. Multiple factors for the stock are Bullish like MACD, Bollinger Band and KST.