- 10 May 2023
- ICICI Securities
SRF reports good Q4FY23 performance largely led by specialty chemicals segment
SRF - 2456 Change: 56.35 (2.35 %)News: SRF reported topline growth of 9% YoY to Rs 3778.1 crore against our expectation of Rs 3730.5 crore led by better-than-expected performance from specialty chemical segment. The revenue from specialty chemical was up 34% YoY to Rs 2101.7 crore vs. 1897.1 crore (I-direct estimates) while the same from technical textile declined 13% YoY to Rs 430.7 crore vs 438.7 crore (I-direct estimates). The revenue from packaging film and other segments was at Rs 1153.1 crore (down 17% YoY) vs. 1214.7 crore (I-direct estimates) and Rs94.3 crore (up1% YoY) vs. 100 (I-direct estimates), respectively. Gross margins declined 311 bps YoY and 115 bps QoQ to 50% in Q4FY23. EBITDA margins for the quarter declined by 205bps YoY to 24.7% resulting into EBITDA de-growth of 2% YoY to Rs931.6 crore against our estimate of Rs943.7 crore. EBIT margins from chemical segment remained at 35% (+310 bps YoY), while the same from technical textile, packaging film and other segments was at 11%(-717 bps YoY), 4% (-1629 bps YoY) & 12% (+189 bps YoY), respectively. SRF reported PAT at Rs 562.5 crore against I-direct estimates of Rs 574.7 crore (down 7% YoY).
Views: The specialty chemical segment continued its strong growth momentum while technical textiles and packaging film segment reported weak quarter on account of several headwinds which impacted the growth. The management, on the other hand, is cautiously optimistic about the packaging industry and anticipates a comeback in technical textile in FY24. However, solid capex plans, strong consumer demand for new and flagship goods, opportunities across various chemistries in both agro and pharma verticals for fluorine compounds, and foray into the specialty fluoropolymers market are anticipated to drive growth momentum, going forward