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Informist, Wednesday, Jan. 29, 2025

--SRF Oct-Dec consol net profit INR 2.71 bln 

--Analysts saw SRF Oct-Dec consol net profit INR 2.26 bln 

--SRF Oct-Dec consol net profit INR 2.71 bln vs INR 2.53 bln year ago 

--SRF Oct-Dec consol revenue INR 34.91 bln vs INR 30.53 bln year ago 

--SRF Apr-Dec consol net profit INR 7.25 bln vs INR 9.14 bln year ago 

--SRF Apr-Dec consol revenue INR 103.80 bln vs INR 95.69 bln year ago 

--SRF Oct-Dec chemical ops sales INR 14.96 bln vs INR 13.94 bln year ago 

--SRF Oct-Dec packaging film ops sales INR 13.85 bln vs INR 10.91 bln yr ago 

--SRF to pay INR 3.60 per share interim dividend 

--SRF Oct-Dec consol EBIT INR 5.29 bln, up 16% on year 

--SRF Oct-Dec packaging films operating profit INR 900 mln, up 100% on year 

--SRF Oct-Dec chemicals business operating profit INR 3.64 bln, up 13% YoY 

--SRF: Applied for 469 patents as of Dec 31 

--SRF: Decent Oct-Dec recovery; to exit FY25 with reasonably strong footing 

By Noopur Bhandiwad

MUMBAI – SRF Ltd.'s consolidated revenue and net profit in the December quarter beat the Street's estimates, with the company reporting a year-on-year rise in the bottom line after 7 quarters of decline. Sequentially, this was the first quarter in this financial year that the company has reported a growth in net profit.

SRF reported a consolidated net profit of INR 2.71 billion for the December quarter, up 7.0% on year. Its consolidated revenue grew 14.4% on year to INR 34.91 billion. As compared to the previous quarter, the company's net profit shot up nearly 35% and revenues grew 2%. Analysts had estimated the company to report a consolidated net profit of INR 2.26 billion and revenue of INR 33.81 billion.

For the nine months ended December, the company's net profit was INR 7.25 billion, down 20.7% on year. The revenue for the period increased 8.5% to INR 103.80 billion.

The company's total expenses for the December quarter increased over 16% to INR 31.62 billion. 

The company announced a second interim dividend of INR 3.60 per share for 2024-25 (Apr-Mar). 

The company's cost of materials increased 14.6% on year to INR 18.69 billion. The company spent INR 3.31 billion on its power and fuel expenses, up 3.7% on year. Its employee benefits expense went up by 6.9% on year to INR 2.61 billion.

Despite higher expenses during the quarter, the company's operating profit rose on higher sales. The company's consolidated earnings before interest and taxes rose 16% on year to INR 5.29 billion. This was largely driven by a sharp rise in profits from its packaging films business, which doubled its operating profit to INR 900 million. At the same time, the operating profit of chemicals, its largest business, rose 13% to INR 3.64 billion.

In terms of sales, the packaging films operations again showed the biggest jump in sales. Despite margins in aluminium foil undergoing pressure due to lower-cost imports from China and Thailand, revenues from its packaging films business grew to INR 13.85 billion, up 27% on year. This aided the overall sales growth as revenue from the chemical business grew only 7% on year to INR 14.96 billion. 

During the quarter, the speciality chemicals business continued to experience some overhang of inventory build-up among agrochemical customers, but demand seems to be rising gradually, the company said in a press release. The fluorochemicals business also received strong support for refrigerants from original equipment manufacturers in the domestic market and its chloromethane segment also showed stable performance during the quarter, the company said. 

Among smaller businesses, technical textiles grew 11% on year to INR 5.10 billion. This business underperformed due to lower demand and margins in the belting fabrics segment. The company said its polyester industrial yarn segment reached full capacity utilisation. Revenues from other businesses declined 11% on year to INR 1.01 billion. Within this, the coated fabrics segment was weak due to poor demand in India. 

The December quarter experienced significant strength in the dollar against major currency pairs, which negatively affected the results due to exchange currency fluctuations, the company said. On the other hand, a weaker rupee is favourable for the company over the long term, it said.

The company has applied for a total of 469 patents as of Dec. 31, it said. The company has so far been granted 151 patents globally. 

On Wednesday, shares of SRF rose 2.5% to INR 2664.85 on the National Stock Exchange. The company announced the results after market hours.  End

Edited by Saji George Titus

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