SRF (SRF IN) – Event Update – ADD on R134a – HOLD
Published on 29 Sep 2025
Based on investigation of Apr’23-Mar’24 data, Indian government has applied anti-dumping duty (ADD) of ~USD4,500/mt on import of R134a from China. SRF is the only manufacturer of R134a in India. However, currently, the difference between import-export realizations has already narrowed down, which would limit the benefit of ADD. Our estimate suggests that for every USD1/kg benefit in domestic realization, impact on FY27 EBITDA would be ~2%. For every 1,000mt additional sales, the impact would also be limited to ~2% of EBITDA. The stock is trading at 43x FY27 EPS. Based on SOTP, valuing the chemicals segment at 27x FY27 EV/EBITDA and packaging and technical textiles at 11x, we arrive at a target of Rs2,947 (earlier Rs3,071). In our earlier note, we had highlighted how R32 prices are likely to come down. Bearing the same in mind, we re-iterate our Hold rating on the stock.
