SRF's consolidated net profit climbed 25.77% to Rs 480.99 crore on 29.72% surge in net sales to Rs 3,651.03 crore in Q2 FY23 over Q2 FY22.
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 company said that during the quarter, both 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. Price of some key raw materials remained elevated during the quarter, impacting overall profitability.
The packaging films business segment reported 24% YoY increase in revenue to Rs 1,331 crore during Q2 FY23 when compared with CPLY. The company said that margins of biaxially-oriented polyethylene terephthalate (BOPET) films were under pressure owing to excessive supply. High energy costs due to the prevailing geopolitical scenario significantly impacted operations in Hungary. However, this trend was partially offset with a sustained demand of 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 to Rs 466 crore during Q2 FY23 from Rs 558 crore reported in Q2 FY22. The company said that 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 to Rs 100 crore in Q2 FY23 when compared with CPLY. The company said that both the coated and laminated fabrics business performed reasonably well in a difficult external environment.
Earnings before interest and tax (EBIT) increased 21% to Rs 689 crore in Q2 FY23 when compared with corresponding period last year (CPLY).
The company's profit before tax increased by 16.09% to Rs 618.08 crore in Q2 FY23 from Rs 532.42 crore recorded in same period a year ago.
The company's board has approved capex aggregating Rs 604 crore for four new plants in the agrochemical space and capacity enhancement of an existing plant at Dahej, India. These projects are a part of the company's overall expansion strategy in the specialty chemicals business and are likely to be completed in the next ten-to-twelve months.
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.
As of 30 September 2022, the company has applied for a total of three hundred and seventy-eight patents. Till date, the company has been granted one hundred and twenty-seven patents globally.
Ashish Bharat Ram, chairman and managing director, 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."
SRF is a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. The company's diversified business portfolio covers fluorochemicals, specialty chemicals, packaging films, technical textiles, coated and laminated fabrics.
Shares of SRF rose 0.44% to end at 2,560.25 on the BSE
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