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Informist, Monday, Jan. 19, 2026

By P. Madhu Kumar

MUMBAI – SRF Ltd.'s net profit for the December quarter is expected to rise more than 50% despite mid-single digit on-year growth in its top line. The rise in profit will be driven by higher margins and realisations in its core chemicals segment. The top line growth will be led by its chemicals business, which accounts for nearly 49% of its revenue. This would be the company's slowest on-year top line growth in seven quarters.

The Indian chemical conglomerate is expected to post a net profit of INR 4.15 billion, up 53% on year and nearly 7% on quarter, according to the average of estimates from nine brokerages. The highest bottom line estimate is INR 4.52 billion from Nuvama Wealth Management Ltd. while the lowest is INR 3.71 billion from Emkay Global Financial Services Ltd.

The chemical maker's top line is projected to grow over 6% on year and just over 2% on quarter to INR 37.17 billion for the quarter under review. The highest top line estimate is INR 38.96 billion by Nuvama and the lowest is INR 35 billion by Kotak Securities Ltd.

The marginal sequential growth in revenue can be attributed to weak sales in the textiles segment and the packaging films business, particularly in biaxially oriented polypropylene films, according to Nuvama. Domestic sales of refrigerants typically slow down in the December quarter, and this will also keep the sales growth low, analysts said. The technical textiles and packaging films segments of the company are also expected to report a subdued quarter, brokerages said.

Technical textiles are fabrics and products used in a wide range of industrial and specialised applications, such as construction, automotive, healthcare, and protective clothing. A biaxially oriented polypropylene film is a clear, strong, and versatile plastic used extensively in packaging for their excellent moisture barrier, clarity, gloss, and printability.

"We expect modest improvements in packaging films volumes with a 7% growth to INR 14.8 billion, with EBIT margin sequentially similar at 9% which leads to a 47.6% YoY EBIT growth to INR 1.3 billion," Nuvama said.

The core chemicals business is projected to report a growth of 23% on year, according to Nuvama. The brokerage said higher prices of refrigerant gas such as R-32 will result in higher realisations, which will boost margin in the chemicals business. Margin of the segment is also likely to benefit from a mismatch in demand and supply in the global market, largely due to strong seasonal shifts. The R-32 volumes may benefit from a reliable availability of the company's own anhydrous hydrogen fluoride, a key raw material in R-32 manufacturing.

"...we estimate a 5.9% on year increase in revenues and a 26% on year rise in EBIT of the chemicals business. The segment's margin will recover 455 basis points YoY (though flat QoQ) at 28.9%, aided by elevated prices of refrigerants," Kotak Securities said in a report.

SRF is expected to post earnings before interest, tax, depreciation, and amortisation of INR 8.13 billion for the December quarter, as per the average of estimates from nine brokerages. The EBITDA estimates range from INR 8.68 billion by Nuvama to INR 7.66 billion by Kotak Securities.

Investors will look for updates on expected demand in the agrochemicals segment and on prices of refrigerant gases. Market participants will also keep an eye out for management comments regarding the surge in import of biaxially oriented polypropylene films into India.

Out of the 12 brokerage recommendations on the company available with Informist, nine brokerages have a 'buy' recommendation on the stock with an average target price of INR 3,490. This is nearly 18% higher from the current market price. Two brokerages have a 'hold' recommendation and only one brokerage has a 'sell' rating on the company's shares.

The company will report its December quarter earnings Tuesday. The stock is down slightly since the company posted its September quarter earnings. Monday, shares of the company closed more than 2% lower at INR 2,962.50 on the National Stock Exchange.

Following are the Oct-Dec earnings estimates for SRF Ltd. from nine brokerage firms in descending order by net profit estimates, with values in INR billion:  

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Edited by Ashish Shirke

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