Dolat Capital Market has given Accumulate recommendation for SRF with a target price of Rs. 7179 in its research report issued on May 06, 2021
Dolat Capital Market’s research report on SRF
SRF reported a healthy set of 4QFY21 financials, Sales/EBITDA/PAT grew by 40.4/63.3/96.5% YoY to Rs 26/6.3/3.8bn respectively. Strong operative leverage helped EBITDA margin increase of 340 bps YoY to 24.3%, gross margins however seem to have declined by 60 bps YoY to 50.0%. PAT growth of 96.5% was fuelled by strong operating performance and lower interest costs of Rs 262mn, down by 44% YoY.
Outlook
We value SRF Ltd on SOTP basis, using EV/EBITDA based methodology and arrive at a target price of Rs 7,179/share.