SRF shares fall over 6% after management cites 'persistent pressure' from Chinese competitors

Shares of SRF Ltd. declined 6% on Wednesday, January 21, after the company's management in a post-earnings conference call said it is facing persistent pressure from Chinese competitors across some of its core product categories.

The SRF management said Chinese players are finding it difficult to sustain these price levels and this situation is not viable in the long run. Agrochemicals used in crop protection are now showing signs of revival, it added.

SRF said tariff uncertainty in the US market may continue to create short-term volatility in fluorochemicals.

The management said it has started witnessing signs of recovery in the domestic market for both BOPP and BOPET from December 2025 onwards.

The business continues to be impacted by margin pressures in belting fabric as Chinese imports and US tariffs-affected export volumes, it said.

The SRF management added that it is cautiously optimistic on demand.

Analyst views

Brokerages Jefferies, Citi, and Morgan Stanley have negative views on the stock and have projected a downside of up to 24.5%.

Jefferies

The brokerage has an "underperform" rating on the stock with a price target of ₹2,640 per share.

Jefferies said SRF's earnings before interest, tax, depreciation and amortisation (EBITDA) was in-line with the analyst's expectations.

Specialty chemicals segment was soft though the fourth quarter will be better due to seasonality, the brokerage said.

The visibility on sustained recovery is elusive, it said.

Refrigerant gas segment was exceptionally strong, but SRF's capacity is fully-utilised with limited volume upside from the previous year, the Jefferies note stated.

The stock has outperformed Nifty 29% in 2025 on refrigerant gas strength and trades at plus one standard deviation (SD) on long-term (LT) average, it added.

Citi

Citi also has a "sell" rating on SRF with a price target of ₹2,575 per share.

It said SRF's third quarter EBITDA increased 26% from the previous year, and 1% sequentially on higher revenues in the chemicals segment. The same was largely driven by higher refrigerant gas volumes and realisations.

Underperformance compared to estimates was driven by lower EBIT margins in the chemicals segment and weaker packaging films and technical textile revenues, Citi said.

The brokerage added that there is a downside risk to consensus expectation of 32% and 19% EBITDA growth in FY26 and FY27 respectively, on the back of:

• High base heading into the fourth quarter


• Continued pricing pressure from low-cost Chinese competition and some deferral of procurement by agro majors seen so far


• R32 capacity additions by multiple players expected in 2026.

Morgan Stanley

The brokerage has an "underweight" rating on the stock with a price target of ₹2,177 per share.

SRF stated that the FY26 guidance of 20% topline growth implies 15% growth in the March quarter from the previous year, compared to the fourth quarter of FY25, Morgan Stanley said. The fourth quarter is SRF's highest revenue generating quarter.

However, this hinges on sharp specialty chemicals lift in the fiscal's fourth quarter, it added.

Shares of SRF are trading 6% lower on Wednesday at ₹2,709.8. The stock has declined 13% in the last one month.

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