SRF Limited, one of India’s most strategically positioned refrigerant and specialty chemicals players, is entering a period of transition that could define its growth trajectory for the next decade. According to a new report by Equirus Research, SRF has weathered two years of broad-based pressure across its chemicals portfolio—from destocking to weak pricing in speciality chemicals and refrigerant gases—but is now poised for a multi-year upswing, with 2028 emerging as the company’s pivotal breakout year.

Equirus Research notes that HFC prices have rebounded 25–86 per cent over the past 15 months as China froze new capacity additions and enforced gas-wise quotas. While agrochemical pricing remains soft, the report highlights that SRF’s ~15-molecule active ingredient (AI) pipeline will steadily ramp up, providing an offset to near-term pressures. “We expect the next two years to stay mixed for SRF as new HFC capacities come up in India and China’s relaxed 2026 norms favour lower-GWP gases,” the report states. “However, we view SRF as a 2028 story, when its scale, quota entitlement, and AI commercialisation converge.”

A central insight from the Equirus Research analysis is the structural advantage embedded in the Montreal Protocol’s CO₂-equivalent–based quota mechanism. Physical HFC manufacturing capacity is not capped; only aggregate climate impact is. Producers receive an annual CO₂e allowance, with full flexibility to optimise their output mix across any of the 18 Annex F HFCs. This “pure basket” system, the report explains, creates tremendous long-term leverage for companies like SRF that historically produced high-GWP molecules. Their high baseline allows much higher physical production of low-GWP gases such as HFC-32 in future years.

Based on its modelling, Equirus Research estimates SRF’s 2028 production baseline at ~70.34mn CO₂e, enabling theoretical output of ~104,200 tonnes of HFC-32—roughly 4.7x its baseline-period average—while remaining fully compliant. This quota headroom, the report argues, gives SRF a significant structural advantage over peers with low-GWP-heavy baselines that translate into materially lower physical tonnage across the next two decades.

Supply-side loosening in 2026, however, may trigger a price correction in low-GWP gases. China has allowed production of any single HFC to rise by up to 30 per cent in 2026 (versus 10 per cent in 2025), and India is adding new HFC-32 capacities. Yet Equirus Research believes high-GWP pricing could remain firm as global markets shift their portfolios.

On the specialty chemicals side, SRF continues to face pricing pressure in DFPA due to global oversupply and weak agrochemical demand. But its diversified AI portfolio—Benzobicyclon, Cyantraniliprole, Fluopyram, Fludioxonil, Flupyradifurone, Florpyrauxifen, Halauxifen, Isocycloseram, Isoflucypram, Metcyclofenstrobin, Pinoxaden, Pyroxsulam, Saflufenacil, Spirotetramat and Sulfoxaflor—provides a meaningful buffer. The firm’s innovation-led pipeline of ~15 upcoming molecules includes six high-potential AIs expected to scale during FY27–FY30 as innovators launch global programmes.

Equirus Research highlights that SRF is positioned to command nearly 55 per cent of India’s HFC quotas post-2027, setting the stage for aggressive expansion in low-GWP gases across 2028–2035. The debut of HFOs in 2027 should allow SRF to enter the fast-growing refrigerant blends segment. The company is also likely to benefit from one-time carbon credit inflows around 2028 for capacities created before the observation period.

“SRF has endured two muted years due to destocking and pricing compression,” the report concludes. “But both engines—HFCs and specialty AIs—show visibility for stronger acceleration beyond 2027. The multi-year growth narrative is likely to become far more visible in 2028.” Equirus Research maintains an ADD rating with a SOTP-based target price of Rs 3,200 (Dec’26).

Key risks flagged by the report include changes in China’s quota norms, removal of its HFC capacity freeze, and any deviations in India’s quota-allocation framework from Montreal Protocol principles.