SRF Q4: Net Profit Falls 24% to Rs 422 Cr, Revenue Declines 5%

by Stock Market News | May 8, 2024 | 0 comments

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In a regulatory filing, the company reported a net profit of Rs 562 crore for the same quarter in the previous year.

SRF Ltd, a leading multi-business chemicals conglomerate, reported a 24% decline in consolidated net profit, amounting to Rs 422 crore, for the fourth quarter of FY24. This represents a significant drop compared to the Rs 562 crore profit recorded in the corresponding quarter last year. The company’s revenue from operations also fell by 5%, down to Rs 3,570 crore from Rs 3,778 crore a year ago.

At the operational level, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) experienced a significant drop of 25%, falling to Rs 696 crore from Rs 932 crore in the previous fiscal year. The EBITDA margin narrowed to 19.5% from 24.6% in the same period last year.

Despite of its poor performance generally, Mr Ashish Bharat Ram who is Chairman and Managing Director mentioned that he was bullish about Chemicals Business with Q4 recovery being stronger which will accelerate further during second half of FY25.

During the quarter under review revenues for Chemicals business declined by14% going down from INR2102cr to INR1816 cr.The Specialty Chemicals segment faced challenges due to inventory adjustments by major clients despite improving from Q3FY24.With China having increased production capacity it has put pricing pressure on intermediate products because of overcapacity too.

The Fluorochemicals Business was impacted by Chinese dumping of refrigerants in India and international markets, leading to pricing issues and affecting volume. Furthermore , slow growth in agrochemical and pharmaceutical industry has dampened demand for key industrial chemicals.

SRF continues maintaining its market dominance as it expands into new regions for its Dymel/propellant segment while at the same time having an array customer base.

As at around this time when I am writing now SRF shares are trading at NSE at INR2412.70 which is down by 6.76% from the previous day close of trading.

Started in 1970 SRF began with its Nylon Tyre Cord plant at Manali ,Tamil Nadu and has grown to become a significant player spanning across Chemicals Business (CB), Packaging Films Business (PFB), and Technical Textiles Business (TTB) accounting for respectively,50%,35%,and13% of revenue in fiscal 2023.Well as other smaller segments these are along with the rest accounting for about 2%.