SRF Limited

sujay85 · August 5, 2019, 8:32pm

Q1 FY 2020 Result

41.38% surge in consolidated net profit YoY (₹189.22 crore vs ₹133.84 crore).
EDIT increased by 16% from Rs. 254 crores to Rs. 295 crores YoY.
9.74% jump in total consolidated income YoY (₹1,843.67 crore vs ₹1,680.09 crore).
Chemicals Business reported an increase of 26% in its segment revenue YoY (₹477 crore to ₹603 crore). Operating profit of this business remained flat at ₹79 crores.
Packaging Films Business reported an increase of 11% in its segment revenue YoY (₹632 crore to ₹702 crore). Operating profit of this business surged by 50% from ₹97 crores to ₹146 crores YoY.
Technical Textiles Business reported a decrease of 11% in its segment revenue YoY (₹501 crore to Rs. 447 crore). Operating profit of this business declined 16% from ₹72 crores to ₹61 crores YoY.
Other Businesses reported an increase of 15% in its segment revenue from ₹67 crores to ₹77 crores YoY. Operating profit of this business grew 50% from ₹5 crore to ₹10 crore YoY.
The company’s Board of Directors approved an interim dividend at the rate of 70 per cent, amounting to ₹7 per share (of ₹10 face value).

Notes

Chemicals Business was negatively impacted due to a slower than expected recovery, post the Dahej site closure in April 2019. However, the loss of production and revenues that hit the Chemicals Business in April and May 2019 is temporary and the Business will be able to meet its customers’ requirements on a full year basis.
Packaging Films Business had an excellent quarter owing to better margins in the BOPET segment and increased sales from the Value-Added Product portfolio.
Technical Textiles Business was impacted negatively due to a slump in the automotive sector.
Sell of its Engineering Plastics Business to DSM India Private Limited has been completed and the Business was divested effective August 1, 2019. The results of the said Business have been reported as discontinued operations for all reported periods.
The Board approved the setting up of an integrated Polytetrafluoroethylene (PTFE) plant along with R22 plant as feedstock, at an aggregate cost of Rs. 424 crores. The project proposes capacity addition of 5,000 million tonnes per annum and is to be completed by October 31, 2021. The project is to be financed through a mix of debt and internal accruals. This is being done to enter into the fluoropolymers segment of fluorocarbons to derive cost advantage from the integrated value chain.

Disc: Invested.

m1hirk · August 7, 2019, 6:53pm

SRF Limited Annual Report 2019 Notes

Your Company performed well in FY19, which is largely due to our diversified business model, with all the core business segments delivering an encouraging operating and financial performance in a fast-evolving and volatile global and domestic environment. This has been possible due to the management’s focus in the last few years to strengthen the Company’s foothold through the strategic levers of operational efficiency, adoption of superior technology, the addition of appropriate value-added products to its portfolio and deeper market penetration.
In the year gone by, we realigned our businesses into four segments to enable a clear understanding of our core businesses. Consequently, the Coated and Laminated Fabrics Business and the Engineering Plastics Business were regrouped as Other Businesses and the erstwhile Chemicals and Polymers Business was renamed as Chemicals Business, which comprises Fluorochemicals and Specialty Chemicals Businesses.
In terms of business segments, the Chemicals Business delivered a healthy performance during the year. In the Fluorochemicals Business, our prudent investments in innovation and technology has made us one of the very few, fully backward integrated producers of Refrigerant Gases in the world, offering the widest portfolio of gases and value-added products to our customers.
We continue to maintain a dominant position with the largest market share of refrigerants in the Indian market, while at the same time further increasing the penetration of our FLoRoN® brand of refrigerants in the overseas markets. The Chloromethanes plant at Dahej, which we commissioned in December 2017, is functioning at optimal level, leading to higher sales for the segment. During the year, we also launched a new product in the Indian market under the name, SUPERTRoN AC Air Pure.
About the Specialty Chemicals Business, while the first six months in FY19 were tough, we are now witnessing a revival in the agro-chemicals space, with new product opportunities emerging in both the agro and pharma segments. Along with the revival in the industry, our committed investments in this business are already in place. These include a cGMP plant, a P32 plant, which is our first-ever, most complex Active Ingredients (AI) plant and a P34 plant, which was commissioned in record time, to seize any opportunities that the future may present.
In the Packaging Films Business, we continue being an ‘Easy to do business with’ partner by delivering excellence in manufacturing, efficiency in supply, and success in customer engagement. Our ongoing investment in our people and manufacturing sites in Thailand and Hungary will ensure we continue to deliver excellence to satisfy the packaging requirements of every customer.
The Technical Textiles Business delivered a steady performance during the year despite a challenging operating environment. Our focus on increasing operational efficiency continues to be an ongoing process. With our investments in capacity augmentation across Tyre Cord Fabric and Belting Fabrics segments, we remain optimistic about the future performance of the Technical Textiles Business.
In May this year, we also signed a definite agreement to sell our Engineering Plastics Business. We view this as a strategic step towards focusing on our core businesses where we see larger growth opportunities emerging in the future.
Total revenue from operations of the Company on standalone basis increased by 38.08 per cent from Rs. 4677.93 Crores in 2017-18 to Rs. 6,459.34 Crores in 2018-19 mainly due to increase in revenue from operations. The profit before interest, depreciation and tax (PBIDT) including ‘other income’ on a standalone basis increased from Rs. 888.72 Crores in 2017-18 to Rs. 1,195.79 Crores in 2018-19.
Profit before tax (PBT) on a standalone basis increased by 35.20 per cent from Rs. 512.64 Crores in 2017-18 to Rs. 693.11 Crores in 2018-19. After accounting for the provision for taxation of Rs. 175.93 Crores, profit after tax (PAT) on a standalone basis increased by 27.49 per cent from Rs. 405.66 Crores in 2017-18 to Rs. 517.18 Crores in 2018-19.
The Business holds global leadership position in most of the products in its portfolio while it continues to invest in improving its capability and take up new age challenging molecules. The Business is strongly focused on increasing value to its customers through its sound technological knowledge and expertise.
The agrochemicals market is slowly picking pace, in line with the global trends. However, the market is still susceptible to pricing pressure coming from crude pricing and unpredictable weather conditions in the customer’s market. New agrochemical projects continue to move forward and are expected to pick up pace in line with the market.
In FY 2019-20, global demand for BoPET Films is expected to remain healthy; however, two new capacities (~75,000 MT/annum) are likely to get added during the year. Demand for BoPET Films in India is expected to grow by ~10% per annum. On the other hand, BoPP Film market will continue to be under pressure. Supply will continue to exceed demand leading to pressure on margins.
In view of the above, SRF’s strategy would evolve around continuously improving Business performance with 100% utilization of its assets and increased focus on Value Added Products, further enhancing the customer experience. Our major endeavor during the year will be to ensure timely start-up of both the new BoPET facilities.
In the Coated Fabrics segment, the Business performance will focus on further increasing the domestic market share and cost reduction initiatives. The Laminated Fabrics segment is likely to face similar oversupply situation in FY 2019-20. The Business will continue to target an increase in the overall sales with a focus on the hot lamination products.

Get more annual report summaries on www.buysitpray.com (Twitter: @ m1hirk)

karu_lamborghi_ · October 3, 2019, 6:29am

https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/SRF_Limited_October_01_2019_RR.html

Rating update notes

Ratings reaffirmed on long term debt of AA+ and rating of A1+ reassigned on short term paper
Chemical business has grown from 28% of revenues to 33% of revenues in Q1FY20 vs Q1FY19
Gross debt to EBITDA is expected to remain below 2.75 times and is a negative if rises above 3 times
ROCE in chemical segment has remained around 9.6% in FY19 and depends upon commercialisation of key molecules
The capex over next two years is expected between Rs 1600-2000 crores and repayment obligation in FY20 is Rs 440 crores

A_shah · December 10, 2019, 4:27am

A good article on SRF

bhaskarbora67 · December 23, 2019, 4:11am

good article on SRF regarding its history upto todays opearations

sujay85 · January 6, 2020, 10:40am

karu_lamborghi_ · February 4, 2020, 12:16pm

Business Update

Specialty chemical business has seen good demand from agrochemical space in global markets
Managements remain optimistic of delivering growth in current FY which will be higher than earlier given guidance
Board has approved capex of Rs 238 crores for dedicated facilities for intermediates of agrochemicals

Participants

• Systematix
• Citigroup
• TCG Asset Management
• Edelweiss
• Ambit Capital
• Equitas Investments
• Axis Capital
• Shubkam Ventures
• Philip Capital
• IDFC Securities
• India Nippon
• Vallum Capital
• Motilal Oswal
• Quantum Securities
• HDFC AMC

QnA

The business in fluorochemicals has got hit due to capitalisation of new plant which has led to added fixed costs and also increased depreciation and thus lower margins
The average tax rate for the next year should be between 26-28% on a standalone basis
Supply still outsrips demand in BOPET segment and as new capacities have been added there should be some softening of margins going forward
The company uses fluorspar from other sources apart from China and thus there is no threat on supplies if corona virus outbreak spreads
The pricing situation in BOPP will continue as of now
There should be better volumes in the next quarter as there were some delays from USA
As more clarity emerges on newer molecules the company will keep adding capacities and communicate that accordingly in the future
The anti dumping duty doesn’t make the company any more competitive and R32 is ramping up at a pretty fast pace
No guidance on margin profile in packaging material business
The management has seen uptick from customers who are supplying to the Latin American market for agrochemicals
As cash flows keep improving the company will be lowering the interest outgo
Export contribution
a. Specialty chemicals: 80-90%
b. Packaging Films: 50-60%
c. Technical Textile: Minimal
d. Fluorochemical business: 50%
There are only 4-5 large agrochemical players in the world and hence from an overall perspective customer concentration is high
Total BOPET capacity is around 1.15 lakh tons and new capacity addition is around 40000 tons
There was an inventory loss of about Rs 7 crores in technical textile business

aravind81 · February 5, 2020, 5:57pm

Looking forward 1-2years out; here is what to look for which would drive growth -

Ramp up of sales after doubling refrigerant gas capacity
Growth in Specialty chemicals (my guess is > 30% CAGR growth)
Hungary BOPET line
Thailand BOPET line
PTFE plant coming up
Rebound in domestic auto sales will be bonus for the technical textile as well as refrigerant gases.

Personally I’m waiting for revenue growth to kick-start.

Disclosure: Invested; hence my views are biased.

sujay85 · June 4, 2020, 3:06pm

“Post-Covid-19, I see a huge opportunity for the chemical industry in India to show significant growth. Having said that, it will depend on each company in India as to how they leverage this opportunity, plus a lot will depend on how we can speed up the regulatory approval process as well. At SRF, we have made the right investments to seize the market opportunities as they arise.” Ashish Bharat Ram, Arun’s son and managing director at SRF, said by email.

Disc: Invested

bhaskarbora67 · June 15, 2020, 8:48am

Srf

Key Highlights of 4QFY20 & Concall Takeaways
Representatives Present on Call:
Mr. Rahul Jain, President & CFO
What We Saw – Quarterly Result – Key Highlights:

SRF’s revenue decreased by 4% YoY to Rs18.5bn in 4QFY20 due to lower segmental revenue
barring chemical business. The demand for Specialty Chemicals was robust, which
contributed to total revenue in line with market expectations.
EBITDA grew by 4% YoY to Rs3.9bn, and EBITDA margin expanded by 160bps YoY to 20.9%,
as the Company did not pass on 14.2% YoY decline in raw material prices.
Net profit grew by 8% YoY to Rs1.9bn aided by lower ETR (11.6%), while net profit margin
improved by 119bps YoY to 10.5%.

What We Heard – Conference Call - Key Takeaways:

COVID-19 Impact: India based manufacturing plants were closed for 15 days and resumed
operations from mid-Apr’20. Though the Company did not face any demand related issue
during the lockdown period, it faced logistic issues, which led to delay in certain shipments.
Chemical Business: Specialty chemical segment’s revenue stood at Rs16.5bn in FY20 which
the Management expects to grow by ~35% in FY21. The Fluor chemicals business was
adversely impacted during the quarter due to subdued demand in automobile sector and
the low prices of the key refrigerants. Impact of COVID-19 related lockdown led to deferral
in certain sales. Regulatory actions by the US on Chinese chemical products may lead to
incremental demand for SRF, and the Company is in fairly well-positioned to cash in on
the opportunity. Focus on ramping-up sales from recently commissioned HFC plants will
aid performance in 2HFY21. The Company continues to focus more on the exports (global
agrochemical majors) with more innovative products.
Operating Margin: Operating margin is expected to moderate in FY21, as new production
lines will start operations and demand-supply mismatch due to COVID 19 could impact
overall operating margin.
Packaging Films Business: Global packaging films industry is witnessing improvement in
capacity utilisation, especially led by COVID-19 pandemic. The Company has commissioned
a BOPET film line of 40,000 TPA in Thailand in May’20 with a capex of U$51mn. The Company
will focus on product approvals and full utilisation, going forward. Incremental capacities in
BOPET may result in lower margin. BOPET line at Hungary is expected to be commissioned
in Jul’20. Growth in the value-added products is in the range of 20-22% YoY. Though product
enquiries are quite strong, product approval is taking a long time in Europe, which will lead
to delayed production ramp-up. Four to five new lines are scheduled in the next three to four
quarters. Incremental increase in the production would be to the tune of 40,000 tonnes per
line, so overall 2,00,000 tonne capacity will be added to BOPET production line. No major
lines seen coming for BOPP.
Technical Textiles Business: Due to COVID-19, the demand for NTCF continues to remain
under pressure, as tyre sales are weak. Replacement demand likely to kick in towards end
of 2QFY20.
Capex & Debt Reduction Plans for FY21: Total capex stood at Rs11bn for FY20 and the
Company expects to reduce debt level by Rs3bn (out of total Rs40bn debt) in FY21. The
Company plans to incur Rs2.5bn capex in next 12 months towards R&D in specialty chemical
business. The Management considers specialty chemical business as the growth driver.
Impact of Lower Crude Price on Packaging & Film Biz: Lower crude prices led to decline in
segmental revenue. However, it did not have impact on margin.
Blended Cost of Debt: Blended cost of debt is around 3.5%-3.75% on global basis.
Diversification from China: A lot of customers have shown interest to reduce dependency
on China. This opens up a huge opportunity for the Company, as it is in a good position to
cash in on the opportunity.
Refrigerant Biz: All the capacities, scheduled to be added in the next two years, will be fully
utilised. Next domestic season for refrigerants will kick start in 4QFY21. So, the export business
for refrigerants will compensate for some losses in India business. Capacity utilisation for
refrigerants has been in the range of 70-75% including the new capacity, which is added on pro rata basis.

11.Outlook for Specialty Chemical Biz: In the medium-term, outlook for specialty chemical
business is positive. For next 2-3 years, there is enough land bank with the Company for
expansion.

Imports from China: There are some imports in specialty chemical business, but in
terms of overall import volume, it is not very significant. The Company does not intend
to go for further backward integration in any other business segment.SRF is mulling to
outsource some of the processes to focus more on the technical aspects.
Tax Rate: Standalone tax rate is expected to be in the range of 27-28%. The companies,
which are based out outside India are either in lower tax regime or are under tax
holiday.

sujay85 · July 31, 2020, 2:35pm

SRF Annual Report
https://www.srf.com/pdf/annual-reports/FY%202018-19/SRF_AR_2018-19.pdf

Annual Report Analysis by Dolat Capital
Annual Report FY20 Analysis - Dolat Capital.pdf (1.0 MB)

The company will set up of Chloromethanes Plant in 18 months by January-end 2022, at a cost of ₹315 crores which will add 1,00,000 million tonne per annum (MTPA) to the existing 95,000 MTPA industrial chemical manufacturing capacity of the company. This expansion will be financed through a mix of debt and internal accruals.

sujay85 · September 4, 2020, 8:20pm

HDFC Securities has also initiated coverage on SRF Ltd.

sujay85 · October 17, 2020, 9:00am

Nirmal Bang has initiated coverage on SRF Ltd.

Mohanlate · July 22, 2021, 4:58pm

BOPP film line in Thailand finally comissioned this month. We should expect this contributing to revenue from next quarter itself.

Valuations continue to be expensive with Enterprise multiples of around 20 as the stock price hit a new 52Wk high today.

Disc. Invested

cool_aksh · July 31, 2021, 3:20pm

9 Years down the line, this one has aged well.

aerofire · November 26, 2021, 8:01am

Raj_A_A · May 10, 2022, 4:57am

SRF Q4FY22 Results- Press release

Consolidated Q4 Financials
The consolidated revenue of the company grew 36% from ₹2,608 crore to ₹3,549 crore in Q4FY22
when compared with Corresponding Period Last Year (CPLY). The company’s Earnings before Interest
and Tax (EBIT) increased 52% from ₹575 crore to ₹876 crore in Q4FY22 when compared with CPLY.
The company’s Profit after Tax (PAT) increased 59% from ₹381 crore to ₹606 crore in Q4FY22 when
compared with CPLY.
Commenting on the results, Chairman & Managing Director, Ashish Bharat Ram said, “We are
closing FY22 on a strong note, with significant growth witnessed in our Chemicals Business and our
other businesses too. With a strong CAPEX pipeline and our emphasis on enhancing our capabilities,
I remain optimistic of our continued success in the future.”

Segment Results
Chemicals : An increase of 36% in its segment revenue from ₹1,153 crore to
₹1,572 crore during Q4FY22 over CPLY. The operating profit of the Chemicals Business increased 83%
from ₹275 crore to ₹504 crore in Q4FY22 over CPLY. During the quarter, the Fluorochemicals Business performed very well on account of higher sales realizations from the refrigerants and chloromethanes segments, in both the domestic and exports markets. We believe that this trend is likely to continue.
Furthermore, strong demand for flagship products and downstream derivatives augured well for the
Specialty Chemicals Business. Continued focus on cost reduction initiatives through process improvement and optimization of asset utilization in both segments of the Chemicals Business
contributed to the overall growth.

Packaging Films : An increase of 42% in its segment revenue from ₹980 crore to ₹1,390 crore during Q4FY22 when compared with CPLY. The operating profit of the Packaging Films Business increased 26% from ₹219 crore to ₹276 crore in Q4FY22 over CPLY. The demand for both BOPET and BOPP films remained buoyant. The Business performed exceedingly well in the overseas markets, and we gained from higher volumes from our recent capitalizations of the BOPET plant in Hungary and BOPP plant in Thailand.

Technical Textiles: an increase of 24% in its segment revenue from ₹401 crore to ₹497 crore during Q4FY22 over CPLY. The operating profit of the Technical Textiles Business increased 26% from ₹73 crore to ₹91 crore in Q4FY22 over CPLY. The Business witnessed significant growth in the Belting Fabrics and the Polyester Industrial Yarn segments, partially offsetting the weak demand for Nylon Tyre Cord Fabrics during the quarter.

Others: An increase of 20% in its segment revenue from ₹78 crore to ₹93 crore in Q4FY22 when compared with CPLY. The operating profit of the Other Businesses decreased 53% from ₹9 crore to ₹4 crore in Q4FY22 over CPLY. Despite a difficult external environment, both Coated and Laminated Fabrics Businesses performed in line with expectations.

Consolidated Annual Resuts : In FY22, SRF’s revenue increased 48% from ₹8,400 crore to ₹12,434 crore over CPLY. The Company’s EBIT increased 55% from ₹1,828 crore to ₹2,835 crore over CPLY. The Company’s PAT increased 58% from ₹1,198 crore to ₹1,889 crore over CPLY.

Capex"
Chemical Business : The Board has approved a project to setup dedicated facilities to produce key specialty products in the new plant structure at Dahej at an estimated cost of ₹115 crore.
The Board has also approved a project for capacity expansion of R 22 at Dahej at an approximate cost
of ₹30 crore.

Intellectual Property : As of March 31, 2022, the company has applied for 361 patents, with ten patents applied during the quarter. Till date, the company has been granted one-hundred and fourteen patents globally.

Dicl: Invested for Long Term

bhaskarmahanta87 · July 21, 2022, 1:57pm

Excellent Q1FY23 Results!
SALES 3895cr vs 2713cr
PAT 608cr vs 395cr
EPS 20.5 vs 13.3
Technical textiles saw QoQ improvement, as guided
Speciality chem showed strong performance
Fluorochem biz performed well
Witnessed slight slowdown in demand for BOPET and BOPP films

Rakesh_Aggarwal · July 22, 2022, 8:14am

Outlook for chemical business

Surender · July 22, 2022, 12:27pm

(@dd1474 ) Dhiraj - A quick question since I think that you follow this business closely:

What is SRF’s management thinking about opportunities in the new and upcoming industrial verticals such as Electric Vehicles, Solar Panels, Hydrogen Fuel Cells /electrolyzers, and Electrical batteries?

TIA.