SRF Limited, a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates, announced its consolidated financial results for the first quarter ended June 30, 2023.

The consolidated revenue of the company declined 14% from Rs. 3,895 crore to Rs. 3,338 crore in Q1FY24 when compared with corresponding period Last Year (CPLY). The company’s Earnings before Interest and Tax (EBIT) decreased 37% from Rs. 938 crore to Rs. 595 crore in Q1FY24 when compared with CPLY. The company’s Profit after Tax (PAT) decreased 41% from Rs. 608 crore to Rs. 359 crore in Q1FY24 when compared with CPLY.

Commenting on the results, Chairman and Managing Director, Ashish Bharat Ram said, “While we have seen a significant drop in our profits, a large portion is attributable to the expected downcycle of the Packaging Films Business. This is expected to continue for the medium-term. The Chemicals Business has been affected by lower sales in our Fluorochemicals Business due to a very mild summer and general weakness in the industrial chemicals segment. The Specialty Chemicals Business has performed as per our expectations with growth over last year. Having said that, as everyone knows, there is a lot of inventory unwinding going on globally and this will have some impact on the business in the next couple of quarters. On the positive side, the longer-term projects remain on track, and we expect to keep our capex momentum intact.”

Consolidated Q1FY24 Segment Results

The Chemicals Business reported a decline of 4% in its segment revenue from Rs. 1,722 crore to Rs. 1,661 crore during Q1FY24 over CPLY. The operating profit of the Chemicals Business decreased 12% from Rs. 520 crore to Rs. 460 crore in Q1FY24 over CPLY. During the quarter, the Specialty Chemicals Business performed well despite weak global demand and ongoing inventory rationalization. The performance of the Fluorochemicals Business was impacted due to mild summers in India, resulting in sluggish demand for refrigerant gases. In addition, stagnant pharmaceuticals and agrochemical industries adversely impacted the demand for some industrial chemicals.

The Packaging Films Business reported a decline of 27% in its segment revenue from Rs. 1,496 crore to Rs. 1,095 crore during Q1FY24 when compared with CPLY. The operating profit of the Packaging Films Business decreased 83% from Rs. 295 crore to Rs. 51 crore in Q1FY24 over CPLY. During the quarter, the Business faced headwinds on account of significant supply addition in the BOPET and BOPP film segments and global economic slowdown.

The Technical Textiles Business reported a decline of 19% in its segment revenue from Rs. 571 crore to Rs. 465 crore during Q1FY24 over CPLY. The operating profit of the Technical Textiles Business decreased 48% from Rs. 116 crore to Rs. 61 crore in Q1FY24 over CPLY. The results of the Technical Textiles Business were impacted, largely on account of margin correction with some Nylon Tyre Cord Fabric (NTCF) customers.

The Other Businesses reported an increase of 12% in its segment revenue from Rs. 106 crore to Rs. 119 crore in Q1FY24 when compared with CPLY. The operating profit of the Other Businesses increased 243% from Rs. 7 crore to Rs. 23 crore in Q1FY24 over CPLY. Both the Coated and Laminated Fabrics Business performed well in a difficult external environment.

Meanwhile, the Board has approved a project to expand the capacity of Anhydrous Hydrogen Chloride (AHCL) that finds application in pharma intermediates at Dahej at a projected cost of Rs. 16.08 crore.