Date:27/04/2005 URL: http://www.thehindubusinessline.com/2005/04/27/stories/2005042701931500.htm

Back SRF gains on possible carbon credit benefits

Virendra Verma

Mumbai , April 26

SHARES of SRF, a company into nylon tyre cord and fluorochemicals business, have been on an upward move on the price chart gaining 50 per cent during the last one month.

Positive sentiment for SRF was possibly on account of the benefits the company is likely to make through carbon credits in the near future.

Carbon credits, which have monetary value, are given to companies across the world that help in reducing polluting gases such as carbondioxide, methane, hydrofluorcarbons and others. These credits to SRF are likely to accrue either from 2006 or 2007 and would come from its flurochemicals business.

The stock price of the company has increased from Rs 82, a month ago on the BSE, to today's closing price of Rs 127, a gain of 54 per cent. In today's trading, the stock was up 6.32 per cent at Rs 127 on the BSE with 20.49 lakh shares being traded.

According to analysts, SRF is one of the largest players in flurochemicals and refrigerants business in India. As per the Kyoto Protocol, SRF would be a major beneficiary of reducing polluting gases. This, in turn, will help the company to receive carbon credits, which have monetary value.

According to a company official, at the moment the company will not be a beneficiary of carbon credits, as it has not yet applied to United Nations for it. He, however, said several host countries have approved SRF name for the benefit.

According to estimates by Kotak Securities, SRF is likely to receive Rs 55 crore to Rs 80 crore annually for 10 years from 2007. This, according to Kotak Securities, is very positive for the company's stock.

Other than the carbon credit, the overall performance of the company has also been good with its biggest business of nylon tyre cord showing good growth.