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SRF Ltd Stock Analysis

Large Cap
Evaluated by 2820 users | BSE: 503806 | NSE: SRF |
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SRF began as Shri Ram Fibres in 1970 when its parent company DCM decided to set up a separate entity to manufacture nylon tyre cord fibres. Its formation was a result of the foresight that nylon was the future material for tyre cord fibres. The company...

1. Right Stock
Very Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
SRF Ltd has performed well in majority of the past ten years indicating its past ten year financial track record is very good
Value Creation
Value Creation Index Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 21.08%16.45%9.18%6.08%8.24%10.36%10.27%8.28%10.95%14.28%
Value Creation Index 0.550.14-0.37-0.58-0.43-0.28-0.29-0.43-0.24-0.01
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 3,4744,0013,7834,0184,5404,5934,8225,5897,6937,419
Y-o-Y Gr. Rt.-15.2%-5.5%6.2%13%1.2%5%15.9%37.6%-3.6%
Adjusted EPS (Rs.) 76.3168.1141.8130.1847.6274.3884.7173.48114.54184.71
Y-o-Y Gr. Rt.--10.8%-38.6%-27.8%57.8%56.2%13.9%-13.3%55.9%61.3%
Book Value per Share (Rs.) 254.28304.56337.56354.65394.66481.01554.1620.6718.11857.82
Adjusted Net Profit 4623912401732734274864226581,062
Net Op. Cash Flow (Rs. Cr.) 6096654233475421,0906456788961,304
Debt to Cash Flow from Ops 1.61.854.036.274.492.313.714.634.163.1
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
SRF Ltd. should be analysed on a Consolidated basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 8.8%10.3%15.4%-3.6%
Adjusted EPS 10.3%31.1%29.7%61.3%
Book Value per Share 14.516.815.719.5
Share Price 37.9% 34% 42.8% 64.7%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 31.0722.0412.578.5912.5316.8816.3612.5117.1123.43
Operating Profit Margin (%) 2621.3416.481316.0121.1920.116.2117.7719.53
Net Profit Margin (%) 13.299.786.354.316.029.310.097.558.5614.31
Debt to Equity 0.630.70.881.071.070.910.750.880.90.82
Working Capital Days 99102113127125123130144135148
Cash Conversion Cycle 42526477776139312339
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Promoters 52.32%
Institutions 28.45%
Non-Institutions 19.23%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of SRF Ltd and arrived at the following conclusion:

Past 10 year's financial track record indicates that SRF Ltd is a good quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of SRF Ltd's performance infers:

SRF Ltd earnings have grown by 31.1%, whereas share price has appreciated 34% CAGR over the past five years, indicating the company's share price is likely overvalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of SRF Ltd share prices over the last 10 years. Here is what we found out:

SRF Ltd share price has appreciated 30.9% annually over the past ten years.

SRF began as Shri Ram Fibres in 1970 when its parent company DCM decided to set up a separate entity to manufacture nylon tyre cord fibres. Its formation was a result of the foresight that nylon was the future material for tyre cord fibres. The company established its first plant in Manali near Chennai in 1973. Over the years, the company not only expanded its product range under the Technical Textiles but also diversified into many adjacent businesses.

SRF began as Shri Ram Fibres in 1970 when its parent company DCM decided to set up a separate entity to manufacture nylon tyre cord fibres. Its formation was a result of the foresight that nylon was the future material for tyre cord fibres. The company established its first plant in Manali near Chennai in 1973. Over the years, the company not only expanded its product range under the Technical Textiles but also diversified into many adjacent businesses. Besides Technical Textiles, the company’s business profile constitutes Fluorochemicals, Specialty Chemicals and Packaging Films. Equipped with state-of-the-art R&D facilities, the company boasts of its Chemical Technology Group that is actively involved in process innovations and product development.

Business area of the company

The Company is a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. The company classifies its businesses as Technical Textiles, Chemicals, Packaging Films and Other Businesses.

Products

The company’s product portfolio broadly categorized into - Technical Textiles, Chemicals and Packaging Films.

Milestones

  • 1970: Incorporated as Shri Ram Fibres
  • 1973: The Company established its first plant in Manali near Chennai.
  • 1974: Commenced operations of nylon tyre cord at Manali.
  • 1977: Production of fishnet twines started.
  • 1979: Commenced production of nylon engineering plastics.
  • 1983: Commissioning of belting fabrics at Viralimalai.
  • 1986: Set up SRF Finance Ltd.
  • 1986: Commissioning of coated fabrics at Viralimalai.
  • 1989: Entered Chemicals Business with production of refrigerants.
  • 1990: Shri Ram Fibres renamed as SRF Ltd.
  • 1993: Divested SRF Nippondenso.
  • 1995: Commercial production of Chloromethanes.
  • 1995: Ventured into Packaging Films Business.
  • 1995: Started Vision Care Division at Bangalore.
  • 1996: Set up the company’s first overseas plant (tyre cord) in Dubai.
  • 1996: Acquired Ceat’s tyre cord fabrics plant situated at Gwalior.
  • 1997: Divested Vision Care Division.
  • 1997: Divested SRF Finance Ltd. to GE Capital.
  • 2000: Acquired Dupont’s tyre cord fabrics plant situated at Gummidipoondi.
  • 2002: Polyester films, fishnet twines and engineering plastics businesses spun off as a separate entity; SRF Polymers Ltd.
  • 2004: Became the first tyre cord company outside Japan to win the Deming Prize.
  • 2008: Acquired two foreign companies - Thailand based Thai Baroda Industries Limited (TBIL), a manufacturer of nylon tyre cord, and South Africa based Industex Technical Textile (Pty) Limited, a manufacturer of belting fabrics.
  • 2009: Purchase of two businesses of SRF Polymers Ltd., the Engineering Plastics and the Industrial Yarn Business.
  • 2009: Became the first Indian manufacturer of polyester industrial yarn (PIY) by setting up a 14,400 MT PIY for producing PIY to be used in radial tyres, conveys belts and coated fabrics.
  • 2010: Ventured into Laminated Fabrics by setting up a green-field plant of 900 sqm annual capacity at Kashipur.
  • 2012: Commenced operations in the newly commissioned Chemical Complex at Dehej in Gujarat.
  • 2012: Wins the prestigious Deming Prize for the Chemicals Business.
  • 2013: Set up green-field facility for BOPET films in Thailand.
  • 2013: Ventured into BOPP films by setting up a green-field plant in South Africa.
  • 2014: Scaled up its HFC 134a capacity by three fold to around 17,500 tonnes per annum with the commissioning for its second HFC 134a plant of 12,500 tpa capacity at Dahej.
  • 2015: SRF acquires Global DuPont Dymel HFC 134a Pharma Business.
  • 2017: SRF inks Pact to Buy Mexichem’s HFC-125 Assets.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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