Motilal Oswal has issued a buy rating on SRF with a target price of ₹3,000 in its research report dated October 22, 2026. The brokerage notes that SRF delivered a healthy performance in Q2 with EBIT growing 30% YoY, led by strong growth across all business segments. The target price is based on SOTP (Sum of the Parts) valuation methodology, with the brokerage maintaining its positive outlook despite weaker-than-expected Q2 performance. Prabhudas Lilladher has upgraded its rating to Hold from Reduce with a target price of ₹2,349 in its research report dated October 22, 2026, maintaining a cautious outlook while noting improved risk-reward dynamics following the recent sharp correction.
Shares of SRF Ltd. recovered around 8% from the day's lows on Thursday, October 22, after the company expressed confidence in delivering the upper end of its FY27 guidance for the chemicals business during its earnings conference call. According to CNBC TV18, the stock had fallen as much as 6.5% on Wednesday, October 21, after SRF's September-quarter earnings missed analyst expectations on the operating front, despite reporting year-on-year growth in revenue and net profit. The stock had opened lower at ₹2,275 and slipped further to touch an intraday low and 52-week low of ₹2,178.30 before recovering. As of 11:10 AM, the stock was trading 3.3% lower at ₹2,228.40, with the stock having declined 14% over the past five trading sessions and 27% in 2026 so far. The stock has also declined 30% over the past year and remained largely unchanged over three and five-year periods.
SRF's net profit for the quarter stood at ₹509.12 crore, representing a 31.2% growth from the year-ago quarter, compared to ₹388.18 crore in the corresponding period last fiscal. Revenue for the quarter stood at ₹4,904 crore, a 35% growth from last year's ₹3,640 crore, and total income rose to ₹4,929.14 crore from ₹3,665.90 crore in the year-ago period. However, EBITDA increased by 25.4% year-on-year to ₹1,009 crore, but EBITDA margin contracted 330 basis points to 20.6%. According to Business Standard, the margin compression was primarily attributed to higher raw material costs. CNBC TV18 reports that EBITDA margin contracted 200 basis points to 19.3% from 21.3% a year earlier, against expectations of an expansion to 22.5%.
SRF announced that its two Chemours plants remain on track, with the first expected to be commissioned in the fourth quarter of FY27 and the second in the first quarter of FY28. The company expects the plants to take around 12 months to achieve full ramp-up, with revenue scaling up by FY29. Management expressed confidence in delivering the upper end of its FY27 guidance for the chemicals business, having earlier guided for 15-20% growth in the segment. However, the specialty chemicals business continues to face persistent challenges with operating EBIT increasing only 10%, considerably slower than its 25% revenue growth. The Chemicals segment grew 25% YoY, driven by robust performance in Fluorochemicals on the back of higher volumes and improved realizations, though Specialty Chemicals remained subdued with volume recovery now expected in select pockets in H2FY27. The company updated its chemicals segment revenue guidance from 15%-20% to ~20% in FY27, with management sounding incrementally optimistic on sequential recovery in H2 FY27.
The Performance Films & Foil business reported strong growth with 51% YoY and 5% QoQ revenue growth to ₹2,122 crore during the quarter, supported by stronger demand across geographies and higher aluminium foil exports to Europe. The segment's operating EBIT rose 73% to ₹206 crore, lifting its margin to 9.7% from 8.4%, with record production, value-added products and demand for aluminium foil supporting performance. However, Prabhudas Lilladher noted that segment EBIT margin normalised to 9.7% from 17.3% in Q1FY27, as the benefit from low-cost inventory was absent during the quarter. The technical textiles business saw 25% YoY revenue growth to ₹595 crore during the quarter, supported by exports and new customer additions in the belting fabric segment, with operating EBIT rising 71% to ₹72.3 crore and margin improving to 12.1% from 8.9%. SRF has approved a ₹600 crore investment in a new aluminium foil facility at Jetapur in Madhya Pradesh, with a planned annual capacity of 12,000 tonnes. The first phase involves ₹300 crore investment and implementation is expected to take 23 months.
