SRF Limited, a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates, board has approved projects for setting up of four new plants in the agrochemical space and capacity enhancement of an existing plant at Dahej to produce various speciality chemicals at an estimated cost of Rs. 604 crore.

The proposed capacity addition is 4,000 MTPA in a 10-12 months timeframe and will be a mix of debt and internal accruals. The capacity will cater to the needs of the customers. In addition, the Board has 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 crore.

In another development, the consolidated revenue of the company grew 31% from Rs. 2,839 crore to Rs. 3,728 crore in Q2 FY23 when compared with the Corresponding Period Last Year (CPLY). The company’s Earnings before Interest and Tax (EBIT) increased 21% from Rs. 569 crore to Rs. 689 crore in Q2 FY23 when compared with CPLY. The company’s Profit after Tax (PAT) increased 26% from Rs. 382 crore to Rs. 481 crore in Q2 FY23 when compared with CPLY.

Commenting on the results, Ashish Bharat Ram, Chairman and Managing Director, SRF Limited 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.”

The Chemicals Business reported an increase of 62% in its segment revenue from Rs. 1,126 crore to Rs. 1,830 crore during Q2 FY23 over CPLY. The operating profit of the Chemicals Business increased 106% from Rs. 251 crore to Rs. 517 crore in Q2 FY23 over CPLY. During the quarter, both our 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. Prices 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 from Rs. 1,072 crore to Rs. 1,331 crore during Q2 FY23 when compared with CPLY. The operating profit of the Packaging Films Business declined (43)% from Rs. 180 crore to Rs. 101 crore in Q2 FY23 over CPLY. Margins of BOPET films were under pressure owing to excessive supply. In addition, high energy costs due to the prevailing geopolitical scenario significantly impacted our operations in Hungary. However, this trend was partially offset with a sustained demand for BOPP films. BOPET film margins are expected to remain muted in the near-term.

The Technical Textiles Business reported a decline of (16)% in its segment revenue from Rs. 558 crore to Rs. 466 crore during Q2 FY23 over CPLY. The operating profit of the Technical Textiles Business declined (53)% from Rs. 133 crore to Rs. 63 crore in Q2 FY23 over CPLY. Subdued demand for Nylon Tyre Cord Fabrics negatively impacted the business. However, 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 from Rs. 86 crore to Rs. 100 crore in Q2 FY23 when compared with CPLY. The operating profit of the Other Businesses increased 33% from Rs. 6 crore to Rs. 8 crore in Q2 FY23 over CPLY. Both the Coated and Laminated Fabrics Business performed reasonably well in a difficult external environment.

As of September 30, 2022, the company has applied for a total of 378 patents. Till date, the company has been granted 127 patents globally.