SRF rose 1.95% to Rs 4,526.50 after the chemical maker reported 4.7% rise in consolidated net profit to Rs 315.20 crore in Q2 September 2020 from Rs 301 crore posted in Q2 September 2019.
Consolidated net sales in Q2 September 2020 stood at Rs 2,062.98 crore, registering a 21% growth over Rs 1,702 crore in Q2 September 2019. The result was announced after market hours yesterday, 4 November 2020.Profit before tax rose 41% to Rs 431.59 crore in Q2 September 2020 from Rs 305 crore in Q2 September 2019. Total tax expense was steeply higher at Rs 116 crore in Q2 September 2020 from Rs 4 crore in Q2 September 2019.
The company's earnings before Interest and Tax (EBIT) increased 66% to Rs 480 crore in Q2 September 2020 from Rs 290 crore posted in the corresponding period last year. The overall EBIT margins expanded by 600 basis points in Q2FY21 when compared with same period last year.
The chemicals business reported an increase of 30% in its segment revenue to Rs 881 crore in Q2 September 2020 from Rs 678 crore reported in Q2 September 2019. The operating profit of the Chemicals Business rose 33% year on year (YoY) to Rs 174 crore in Q2 September 2020. The Specialty Chemicals Business reported a robust performance on the back of higher capacity utilization of dedicated and multipurpose plants, which led to better operating leverages and the expansion of overall margins. Sales of the Fluorochemicals Business remained muted owing to weak demand for refrigerants from the automobile and air-conditioning segments and low prices of refrigerants globally.
The packaging films Business reported an increase of 26% YoY to Rs 833 crore in Q2 September 2020 from Rs 663 crore registered in Q2 September 2019. The operating profit of the Packaging Films Business increased 89% YoY to Rs 246 crore in Q2 September 2020. The Packaging Films Business performed exceedingly well with expanded margins when compared with CPLY, and better capacity utilizations post the commissioning of BOPET film capacities in Thailand and Hungary. Further, the Business' sustained focus on the sales of Value-Added Products contributed significantly to the overall performance.
The technical textiles business reported an increase of 3% YoY to Rs 332 crore which resulted in 140% jump in operating profit to Rs 50 crore in Q2 September 2020. The business delivered a healthy performance due to faster-than-expected recovery in the domestic tyre industry
Commenting on the results, Ashish Bharat Ram, MD of SRF said, We have had an outstanding quarter by all standards led by our Packaging Films and Specialty Chemicals businesses. Going forward, the margins of the Packaging Films Business will soften. Having said that, I am confident that the momentum in our other businesses will ensure that we have a good year.
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The board approved the setting up of a second BOPP film line in India at a site in Indore at an approximate cost of Rs 424 crore. The board also approved the setting up of a dedicated facility to produce 200 MT per year of P16 specialty product at Dahej, India at an approximate cost of Rs 17.5 crore. In addition, the board approved two projects related to future water security and set up of thermal oxidation facilities at the company's chemicals complex at Dahej, India. These projects are aimed at minimizing the environmental impact of the chemicals business and ensuring the future sustainability of the Dahej site.
SRF is a chemical based multi-business conglomerate engaged in the manufacturing of industrial and specialty intermediates.
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