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Informist, Monday, May 4, 2026

 

By Ruchira Kagita

MUMBAI – SRF Ltd. is expected to report muted earnings for the March quarter as growth in its specialty chemicals and packaging films businesses is likely to be weak. However, the company's fluorochemicals business is expected to see strong growth as prices of hydrofluorocarbons remained firm. Any material impact of supply disruptions due to the war in West Asia is unlikely in the quarter under review. However, pricing pressure from China may have continued.

 

SRF's consolidated net profit for the March quarter is expected to grow roughly 7% on year to INR 5.63 billion while the revenue for the period is likely to fall a bit to INR 43.06 billion, according to an average of estimates from nine broking firms. The highest estimate for net profit is from Equirus Securities Pvt. Ltd., which sees the profit rising almost 29% to INR 6.77 billion. At the other end of the spectrum, Elara Securities (India) Pvt. Ltd. expects the chemical company's net profit to slide nearly 50% to INR 2.64 billion. Motilal Oswal Financial Services Ltd. has the highest estimate for the company's Jan-Mar revenue at INR 47.24 billion. The expectation of Elara Securities is the lowest at INR 33.52 billion.

 

SRF may report a 6.2?ll on year in its earnings before interest, taxes, depreciation, and amortisation for the March quarter to INR 9.73 billion, according to an average of estimates from eight brokerages. Five of the eight broking firms expect the company's EBITDA to fall.

 

The company's refrigerant gas division is likely to post healthy growth in the March quarter and demand within this space is steady. Supply of a key raw material for the business, fluorspar, is not dependent on the Strait of Hormuz and that bodes well for the company, Elara Securities said in its research report. The SRF management had earlier said in a call with analysts that the demand for refrigerant gas difluoromethane, or R-32, is likely to be fairly firm in the near term. For the March quarter, "refrigerant gases continue to have their dream run, thence supporting solid margins," Nuvama Wealth Management Ltd. said in its report.

 

Top executives at SRF had said they will speak about the progress on clearances for its refrigerant gas project in Odisha during the annual conference call. Investors will keep an eye out for this commentary.

 

Meanwhile, the company's specialty chemicals business may have remained weak in the three months ended March. The management had highlighted that competition from China weighed on this division in the December quarter. This pressure may be seen even in the reporting quarter, according to brokerages.

 

The revenue of SRF's chemicals business is seen increasing 2.4% on year to INR 24.12 billion and its earnings before interest and taxes are expected to fall almost 1% to INR 7.49 billion, ICICI Securities Ltd. estimated. Equirus Securities expects the segment's revenue to be flat, owing to lower volumes and realisations in the specialty chemicals space.

 

According to ICICI Securities, the price of biaxially oriented polyethylene terephthalate, or BOPET, declined 12.8% to INR 116 per kg on year and that of biaxially oriented polypropylene, or BOPP, fell 4.9% to INR 146 a kg during the March quarter. Meanwhile, fluorspar prices were flat on year, the brokerage noted. Lower prices of the two polymer films, which are key raw materials for SRF's packaging business, are typically indicative of over-capacity and soft demand. The company's sales from the packaging films business are seen declining marginally on year in the quarter under review, ICICI Securities noted in its report.

 

However, brokerages have indicated in their commentary that prices of raw materials for its packaging films business and of agrochemicals have gone up recently because of the war in West Asia, but the impact of this is unlikely to be seen in the quarter gone by. Margins for SRF in the June quarter may come under pressure if the cost inflation is not passed on, Nuvama said.

 

The management's commentary on pricing competition from China will be key. Top executives of the company had highlighted that Chinese prices of biaxially oriented polyethylene terephthalate were likely to inch upwards. With SRF offering the same products at lower prices, it would be a positive development for the Indian company's packaging business. Update on the progress of the company's new pharmaceutical intermediates plant at Dahej in Gujarat will also be important to note.

 

According to two brokerages, for the financial year 2025-26 (Apr-Mar), SRF could see its consolidated net profit rising 47-61% on year to be in the range of INR 18.39 billion and INR 20.15 billion. Its net sales may go up 3-8% and be between INR 158.96 billion and INR 151.04 billion. For FY26, the company had guided for capital expenditure to be INR 22 billion. In a conference call January after reporting its earnings for the December quarter, it had said it was confident of fulfilling this guidance.

 

Of the 12 brokerage reports on SRF available with Informist, ten have a "buy" call on the stock with an average target price of INR 3,388. Two brokerages have a "hold" stance. The company had reported its earnings for the December quarter on Jan. 20. Since then, its stock has fallen almost 12%, touching its 52-week low in this period. Monday, the stock closed 1.3% higher at INR 2,551.40 on the National Stock Exchange.

 

For SRF, following are the earnings estimates for the March quarter, in INR billion, from nine brokerages in descending order of net profit:

 

Brokerage Firm	Net Sales	Net Profit	EBITDA
Equirus Securities Pvt. Ltd.	44.27	6.77	11.7
Batlivala & Karani Securities India Pvt. Ltd.	46.29	6.43	--
Emkay Global Financial Services Ltd.	46.09	6.32	11.12
Motilal Oswal Financial Services Ltd.	47.24	6.27	10.87
Prabhudas Lilladher Pvt. Ltd.	39.32	5.86	8.41
ICICI Securities Ltd.	43.81	5.71	10.27
Nuvama Wealth Management Ltd.	43.13	5.42	9.88
Kotak Securities Ltd.	43.85	5.28	9.6
Elara Securities (India) Pvt. Ltd.	33.52	2.64	5.99
Average	43.06	5.63	9.73

 

End

 

Edited by Rajeev Pai

 

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