SRF Q2 Results: Profit Falls 37%, Misses Estimates
The chemical manufacturer's profit fell to Rs 300.78 crore in comparison with Rs 480.99 crore in the year-ago period
SRF Ltd.'s net profit declined 37.46% in the second quarter of fiscal 2024, missing analysts' estimates.
The chemical manufacturer's profit fell to Rs 300.78 crore in comparison with Rs 480.99 crore in the year-ago period, according to its exchange filing on Friday. That compares with the Rs 341.37 crore consensus estimate of analysts tracked by Bloomberg.
SRF Q2 FY24 Highlights (YoY)
Revenue down 14.77% at Rs 3,177.36 crore (Bloomberg estimate: Rs 3,279.19 crore).
Ebitda declines 18.58% to Rs 626.21 crore (Bloomberg estimate: Rs 665.66 crore).
Margin at 19.7% vs 20.63% (Bloomberg estimate: 20.3%).
Net profit down 37.46% at Rs 300.78 crore (Bloomberg estimate: Rs 341.37 crore).
The chemicals business reported a decrease of 22% YoY in its segment revenue from Rs 1,830 crore to Rs 1,426 crore. The operating profit of the chemicals business fell 33% YoY from Rs 517 crore to Rs 348 crore.
During the quarter, the specialty chemicals business witnessed weak global demand owing to the ongoing inventory rationalisation by certain key customers. The performance of the fluorochemicals business was adversely impacted due to low demand for refrigerants and resultant pressure on margin.
In addition, sluggish growth in the pharmaceuticals and agrochemical industries adversely impacted the demand for some industrial chemicals.
The packaging films business reported a decrease of 16% YoY in its segment revenue from Rs 1,331 crore to Rs 1,122 crore. The operating profit of the packaging films business declined 24% YoY from Rs 101 crore to Rs 77 crore.
During the quarter, the packaging films business faced headwinds on account of substantial supply addition in both BOPET and BOPP film segments, resulting in significant pressure on margin and an overall demand slowdown globally.
The technical textiles business reported an increase of 9% YoY in its segment revenue from Rs 466 crore to Rs 506 crore. The operating profit of the technical textiles business increased 19% YoY from Rs 63 crore to Rs 75 crore. During the quarter, it performed well owing to higher sales volume of its flagship Nylon Tyre Cord Fabric.
Additionally, the business witnessed healthy demand for its belting fabrics and polyester yarn segments due to increased infrastructural spending by the government.
The board has approved a project for setting up a manufacturing facility for Capacitor Grade BOPP Film at Indore, at a projected cost of Rs 275 crore, according to the press note.
The board has also approved a project for setting up a new and dedicated facility to produce an agrochemical intermediate at Dahej, at a projected cost of Rs 235 crore to meet growing demand for the product in the future.
Shares of SRF were trading 0.51% higher at Rs 2,117 apiece, as compared with a 1.06% rise in the benchmark NSE Nifty 50 as of 2:49 p.m.