SRF Ltd Q2 Results FY2023, PAT at Rs. 481 crores

On 3rd November 2022, SRF Ltd announced its quarterly results for the second quarter of FY2023.

Q2FY23 Performance updates:

- The consolidated revenue of the company grew 31% to Rs.3,728 crores in Q2FY23.
- The company’s Earnings before Interest and Tax (EBIT) increased 21% to Rs.689 crores in Q2FY23 when compared with CPLY.
- The company’s Profit after Tax (PAT) increased 26% to Rs.481 crores in Q2FY23.

Business Highlights:

- The Chemicals Business reported an increase of 62% in its segment revenue to Rs.1,830 crores during Q2FY23. The operating profit of the Chemicals Business increased 106% to Rs.517 crores in Q2FY23. 
- During the quarter, both Fluorochemicals and Specialty Chemicals Businesses performed exceedingly well on account of higher sales volumes, especially driven by international revenues and better realizations. Demand for existing and new, niche products aided overall sales. The price of some key raw materials remained elevated during the quarter, impacting overall profitability.
- The Packaging Films Business reported an increase of 24% in its segment revenue to Rs.1,331 crores. The operating profit of the Packaging Films Business declined by 43% to Rs.101 crores in Q2FY23. Margins of BOPET films were under pressure owing to excessive supply. In addition, high energy costs due to the prevailing geopolitical scenario significantly impacted the company’s operations in Hungary. 
- The Technical Textiles Business reported a decline of (16)% in its segment revenue to Rs.466 crores during Q2FY23. The operating profit of the Technical Textiles Business declined by 53% to Rs.63 crores in Q2FY23. Subdued demand for Nylon Tyre Cord Fabrics negatively impacted the business. Belting Fabrics and Polyester Industrial Yarn segments witnessed healthy growth during the quarter. 
- The Other Businesses reported an increase of 16% in its segment revenue to Rs.100 crores in Q2FY23. The operating profit of the Other Businesses increased 33% to Rs.8 crores in Q2FY23. Both the Coated and Laminated Fabrics Business performed reasonably well in a difficult external environment.
- The Board has approved capex aggregating Rs.604 crore for four new plants in the agrochemical space and capacity enhancement of an existing plant at Dahej, India. These projects are a part of SRF’s overall expansion strategy in the Specialty Chemicals Business and are likely to be completed in the next ten-to-twelve months. 
- The Board has also approved a project to develop a Kilo Lab at Bhiwadi to address the needs of the Pharma market at a projected cost of Rs.9.8 crores.

Commenting on the results, Chairman and Managing Director, Ashish Bharat Ram said, “Our Chemicals Business has performed exceedingly well once again. The Packaging Films Business is witnessing historically low margins in the polyester film segment and the Technical Textiles Business is suffering from weak demand for tyre cord. Despite a challenging global scenario, we remain cautiously optimistic about the near-term outlook for our Chemicals business.”

SRF Ltd share price dropped by 2.91%.