SRF - Building Capacity To Seize The Opportunity: Motilal Oswal
SRF has aggressively expanded its capacity to capitalise on the impending opportunity in the packaging film industry.
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Motilal Oswal Report
In this report, we have analysed SRF Ltd.’s packaging films division. The company has aggressively expanded its capacity to capitalise on the impending opportunity in the packaging film industry, with a shift in consumer buying behavior. We have analysed the packaging film industry and the competitive intensity of SRF. The key highlights are as follows:
Over the last seven years, SRF aggressively incurred a cumulative capex of Rs 32.3 billion on building its packaging film division, resulting in an industry leading revenue/Ebitda compound annual growth rate of 21%/39%, followed by polyplex corporation at 11%/24%.
Global demand for packaging films is expected to be driven by low penetration of packaged food, higher adaptability of flexible packaging, rising trend toward easily recyclable packaging solutions, innovative packaging, and e-commerce.
However, higher competitive intensity and additional capacity build up in the industry may pressurise industry profitability in the short term.
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