For FY22, SRF’s capex allocation stands at Rs 1,500-1,800 crore. The capex spent so far is nearly Rs 600 crore, which is expected to go up in H2
PRO Only Highlights
– Quarterly performance largely backed by improved realisations
– Medium-term triggers China plus and protectionist measures for tyre industry
– Valuations not inexpensive; but improved medium-term outlook
SRF (CMP: Rs 2,111; Market Cap: Rs 62,521 crore) posted another strong quarter as far as topline numbers are concerned. However, margins have turned shaky due to multiple headwinds related to raw material costs and supply-chain challenges. Among key segments, the packaging business is pointing towards a cyclical downside in margins and the chemical business requires a reset of long-term contracts to pass through input costs. The demand environment has strengthened, leading to a strong order book in all segments. However,…
