The year 2021 has delivered a huge number of multibagger stocks. Shares of SRF Limited have doubled investors' money so far in 2021. In comparison, the Nifty 50 index gained over 25 percent and the S&P BSE Sensex index rose over 23 percent.
This multibagger stock has surged from Rs 5,571.8 to Rs 11,296.65 mark. It has gained 103 per cent since the beginning of this year and has risen 159 per cent in the last one year.
Long-term investors have made fortunes by investing in this chemical stock as it has surged 580 per cent in the last five years and zoomed 3,523.5 per cent in the last ten years.
The large-cap stock rose 6 per cent to hit an all-time high of Rs 11,296.65 on BSE. With a market capitalisation of more than Rs 66,000 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
The company reported a net profit of Rs 395.28 crore for the quarter ended June 2021 compared to a profit of Rs 177.09 crore in the year-ago period. Revenue from operations grew 75 per cent to Rs 2,699.40 crore in the June-ended quarter against Rs 1,545.15 crore a year ago.
"The company's business is expected to do well on the back of higher demand in domestic A/C and an increase in refrigerator production capacities in light of various government policies and initiatives - such as the ban on pre-charged AC imports, PLI, Atmanirbhar Bharat, and an increase in personal mobility boosting the Auto sector," said Motilal Oswal.
"Overall, the overall business performance is expected to improve, led by (a) better capacity utilization and the commissioning of new plants such as CMS in 2HFY22, (b) sales ramp-up in Anhydrous Hydrogen Chloride, and (c) other cost improvement initiatives, including the stabilization of the supply chain," added the brokerage house.
"The long-term business prospects remain robust with a healthy product pipeline, a large capex plan in chemicals and packaging films and the ramp-up of new capacities in refrigerants. The shift in TTB's margin profile would increase the overall margins by 70-80bps and offset the expected softness in PFB margins to some extent," noted Systematix.
Dolat Capital expects SRF's total debt/EBITDA ratio to moderate from 1.72x in FY21 to 0.98x in FY24E as they expect the company to start generating a positive FCFF beyond FY23E. The brokerage firm has upgraded the EPS by 9% an 6% respectively in FY22 and FY23 owing to higher than expected sales from refrigerant gases and an improvement in the margins of technical textiles.
According to MarketsMojo, the company has healthy long-term growth as Operating profit has grown by an annual rate 23.27% and has declared positive results for the last 4 consecutive quarters. The technical trend has improved from Mildly Bullish on April 6, 2021, and has generated 82.97% returns since then.
The stock is technically in a Bullish range now and multiple factors for the stock are Bullish like MACD, Bollinger Band, KST, DOW and OBV. However, it noted that the valuation is very expensive right now.
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