Fundamental

SRF
Ticker : 503806
BUY: Rs 2244
Target: Rs 2495 

SRF Limited is engaged in manufacturing of chemicals and polymer, technical textiles and packaging films. In Q3FY19, the company’s revenue increased by 40.6 per cent YoY from Rs 1397 crore to Rs 1964 crore. EBITDA grew by 43 per cent YoY during the quarter and the EBITDA margin expanded by 30 bps to 16.9 per cent. PAT during the quarter surged by 26.3 per cent YoY from Rs 131.20 crore to Rs 165.7 crore. The revenue from chemicals segment grew by 45.8 per cent YoY. It has the largest market share in the fluorochemicals segment, which is delivering strong volume growth. It is also debot- tlenecking capacity at Dahej with investment of Rs 140 crore for agrochemicals. The new projects in Thailand and Hungary are expected to drive the growth going further. Thus, we recommend it as a BUY. 

BALRAMPUR CHINI MILLS
Ticker : 500038
BUY: Rs 117.45
Target: Rs 135 

Balrampur Chini Mills is engaged in manufacturing of sugar, ethanol and power. In Q3FY19, the company’s revenue declined by 6.1 per cent YoY to Rs 941 crore. However, EBITDA was up by 47 per cent and margin jumped from 11 per cent to 17 per cent. PAT jumped by 95.9 per cent YoY to Rs 120.3 crore. The company is expanding its ethanol capacity from 11.5 crore litre to 18 crore litre by December 2019. The board of directors has declared interim dividend of 250 per cent, i.e. Rs 2.50 per share on face value of Re 1. Recently, the government has asked the domestic sugar mills to export five million tonnes in FY19 to liquidate the excess sugar stock. This move will provide financial aid to the sugar companies. Considering the above factors, we recommend it as a BUY.