SRF Ltd Share Price – NSE  /  BSE

Chemicals, Mid Cap

The company has incorporated SRF Middle East for trading in refrigerant gases by subscribing 365 equity shares at a face value of Rs 1,000 each aggregating to AED 365,000. The company will hold 100% shareholding in the Middle East.

The Dubai Supreme Council of Energy has granted a NOC for trading in industrial gases, while the Department of Economy and Tourism issued a commercial license for the subsidiary on 12 March 2024.

SRF is a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. The company's diversified business portfolio covers fluorochemicals, specialty chemicals, packaging films, technical textiles, coated and laminated fabrics.

The specialty chemical maker's consolidated net profit slipped 50.4% to Rs 253.43 crore on 12% decline in revenue from operations to Rs 3,053.04 crore in Q3 FY24 over Q3 FY23.

Shares of SRF were trading lower by 1.22% to Rs 2,393.10 on the BSE.

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Profit before tax in Q3 FY24 was at Rs 348.32 crore, down 44.79% year on year.

Earnings before interest and tax (EBIT) fell 37% to Rs 457 crore in Q3 FY24 as against Rs 726 crore posted in corresponding period last year (CPLY).

The chemicals business reported a decrease of 21% in its segment revenue to Rs 1,394 crore during Q3 FY24 from Rs 1,757 crore recorded in Q3 FY23. The operating profit of the chemicals business decreased 43% to Rs 322 crore in Q2FY24 over CPLY. During the quarter, the specialty chemicals Business continued to face headwinds due to inventory rationalization by certain key customers, while performing better than Q2FY24.

During the quarter, the fluorochemicals business was adversely impacted owing to seasonally low demand for refrigerants. In addition, sluggish growth in the agrochemical and pharmaceutical industries adversely impacted the demand for some key industrial chemicals, the company stated. On the positive side, firm commissioned the PTFE facility and the HFC expansion project during the quarter.

Revenue from packaging films business decline 9% to Rs 1,091 crore during Q3 FY24 when compared with corresponding quarter last year. The operating profit of the packaging films business slumped 62% to Rs 45 crore in Q3 FY24 over Q3 FY23. During the quarter, the performance of the packaging films business was adversely impacted on account of substantial supply addition in both BOPET and BOPP film segments, resulting in significant pressure on margins and an overall demand slowdown globally.

On the positive side, aluminium foil facility got commissioned during the quarter and company will look to ramp up sales over the ensuing quarters. With this project, it will be amongst very few players globally who offer a wide portfolio of packaging substrates BOPET, BOPP and aluminium foil under one roof.

The technical textiles business reported an increase of 8% in its segment revenue to Rs 458 crore from Rs 426 crore during Q3FY24 over CPLY. The operating profit of the technical textiles business zooms 101% to Rs 69 crore from Rs 34 crore in Q3FY24 over CPLY. During the quarter, the technical textiles business performed well owing to healthy domestic demand for its flagship nylon tyre cord fabric, despite our facility in Manali being adversely impacted due to cyclone Michaung. Demand for belting fabrics and polyester Yarn remained strong, and the business performed well.

The other businesses reported an increase of 23% in its segment revenue to Rs 114 crore from Rs 92 crore in Q3FY24 when compared with CPLY. The operating profit of the other businesses surged 132% to Rs 21 crore from Rs 9 crore in Q3FY24 over CPLY. During the quarter, the coated fabrics segment performed well because of strong domestic sales driven by healthy demand for its products. The Laminated Fabrics segment also performed in line with the expectations.

As of 31 December 2023, the company has applied for a total of four hundred and thirty patents. Till date, the company has been granted one hundred and forty-six patents globally.

Chairman and managing director, Ashish Bharat Ram, SRF, said, “While this has certainly been a tough quarter, we can see things improving in the Chemicals Business. We are confident of a significantly improved performance in the 4th quarter. With a large number of plants coming on stream, our focus will be on scaling these up as quickly as possible in the months ahead.”

Meanwhile, the company’s board has declared a second interim dividend of Rs 3.60 per share for FY24. Record date will be Wednesday, 7 February 2024. The date of payment of interim dividend will be Wednesday, 28th February 2024.

Further, the board also approved the proposal for raising of funds through issuance of non-convertible debentures (NCDs) on private placement basis, for an amount up to Rs 1,000 crore in one or more tranches.

SRF is a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. The company's diversified business portfolio covers fluorochemicals, specialty chemicals, packaging films, technical textiles, coated and laminated fabrics.

The scrip rallied 3.32% to Rs 2,296.95 on the BSE.

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SRF has fixed 07 February 2024 as record date for 2nd interim dividend of Rs 3.60 per share for FY 2024. The dividend will be paid on 28 February 2024.

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The Board of SRF at its meeting held on 30 January 2024 has approved the proposal for raising of funds through issuance of Non- Convertible Debentures (NCDs) on private placement basis, for an amount up to Rs. 1,000 crore in one or more tranches.

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