SRF Q3FY22 Results: Profit rose 56% YoY to Rs 506 crore; declares interim dividend of Rs 4.75/share

SRF Limited, a multi-business chemicals conglomerate, today reported a 55.68 per cent YoY rise in the consolidated profit at Rs 505.54 crore for the quarter ended December 31, 2021. It had posted a profit of Rs 324.73 crore in the corresponding quarter last fiscal.

The company's revenue from operations grew 55.88 per cent YoY to Rs 3,345.87 crore in the period under consideration against a revenue of Rs 2,146.41 crore in last year. Its EBITDA grew 55.69 per cent to Rs 881.41 crore in December 2021 quarter against an EBITDA of Rs 566.12 crore posted last year. The company's margin remained flat at 26.4% YoY.

The company's Earnings before Interest and Tax (EBIT) increased 66 per cent from Rs 479 crore to Rs 796 crore in Q3FY22 when compared with the corresponding period of last year (CPLY).

Commenting on the results, Managing Director, Ashish Bharat Ram said, "It's been an outstanding quarter for the company. Except for the Technical Textiles segment, which was impacted by soft market conditions, every other segment performed exceedingly well. We remain cautiously optimistic of our performance going forward."

Interim Dividend

In today's meeting, the board also approved a second interim dividend at the rate of 47.5 per cent amounting to Rs 4.75 per share. Earlier on July 28, 2021, the board had approved the first interim dividend at the rate of Rs 12 per share.

The Chemicals Business reported an increase of 58 per cent in its segment revenue from Rs 906 crore to Rs 1,428 crore during Q3FY22 over CPLY. The operating profit of the Chemicals Business increased 121 per cent from Rs 190 crore to Rs 419 crore in Q3FY22 over CPLY. During the quarter, the Fluorochemicals Business performed exceedingly well on account of higher prices of certain key refrigerant products in critical international markets and increased export volumes in HFC blends. In addition, the healthy contribution from the chloromethanes segment augmented the overall results.

With an expanded product portfolio, the Specialty Chemicals Business had a healthy quarter. This was largely on account of strong demand from the overseas markets, higher capacity utilization of dedicated/multipurpose facilities and significant cost-savings across all product streams. Several new plants commissioned during the year contributed to the overall performance.

The Packaging Films Business reported an increase of 59 per cent in its segment revenue from Rs 802 crore to Rs 1,276 crore during Q3FY22 when compared with CPLY. The operating profit of the Packaging Films Business increased 20 per cent from Rs 212 crore to Rs 254 crore in Q3FY22 over CPLY. The Packaging Films Business performed very well during the quarter with both the domestic and international facilities delivering robust results. Scale, operating leverage, and strong demand from global, marquee customers on the back of PFB's 'Easy to Do Business With' philosophy have helped establish SRF as a renowned player in the global packaging industry.

The Technical Textiles Business reported an increase of 47 per cent in its segment revenue from Rs 367 crore to Rs 538 crore during Q3FY22 over CPLY. The operating profit of the Technical Textiles Business increased 67 per cent from Rs 68 crore to Rs 114 crore in Q3FY22 over CPLY. The Technical Textiles Business witnessed healthy performance despite weak demand for Nylon Cord Fabrics during the quarter.

Overall, the Business continues to focus on operating efficiencies and running plants optimally. The Other Businesses reported an increase of 45 per cent in its segment revenue from Rs 74 crore to Rs 107 crore in Q3FY22 when compared with CPLY. The operating profit of the Other Businesses increased 4 per cent from Rs 8 crore to Rs 9 crore in Q3FY22 over CPLY. Both the Coated and Laminated Fabrics Business performed very well in a difficult external environment.

Besides, the Board of Directors of the Company today also has approved the issuance of Rated, Listed, Unsecured, Redeemable Non-Convertible Debentures of the face value of Rs 10 lakh each, for an aggregate principal amount of up to Rs 750 crore, on a private placement basis, in one or more series/ tranches to certain eligible investors permitted to invest in the NCDs under applicable laws.

In addition, the Board has approved a project to set up an Aluminium Foil manufacturing facility at a new site in Jaitapur, Indore, India at a projected cost of Rs 425 crore to meet the growing demand for Aluminium Foil, which is mainly driven by packaging requirement for food products in the domestic and exports market. The project is expected to be completed in twenty months.

The Board has approved the setting up of a new Pharma Intermediates Plant at its chemical complex in Dahej, India at an estimated cost of Rs 190 crore to further augment its Pharma manufacturing capability and become future-ready to tap into new and upcoming business opportunities in the Pharma vertical.

The Board has also approved the setting up of a dedicated facility to produce 300 MT per year of a key agrochemical product at its chemical complex in Dahej, India at an estimated cost of Rs 61 crore.