SRF hit a new 52-week high yesterday at Rs.3044.25 and today it rose 2% to Rs.3036.45. In this last one year, it has outperformed the Sensex by over 55%.
The company is a huge beneficiary of China shutting down its specialty chemical units to bring pollution levels down. China made 20% of the global specialty chemicals and it is currently either shifting some of them to cluster of chemical zone or shut down many. This has spiked up the prices as supply has come down and this in turn is leading most vendors to India. This development began in 2016 and it is now that we are feeling the impact. Hubei Chuyuan, one of the largest chemical companies in the world was shut down by China in 2017.
Crisil has put out a report stating that with this development will give a huge advantage to Indian manufacturers as they are increasing capacities to meet the increased demand and even the new expanded capacities will have higher utilizations over the medium terms as they are more environment compliant and cost effective.