SRF Q3 Results Review - Longer Term Growth Trajectory Intact: IDBI Capital

IDBI Capital Report

SRF Ltd.'s delivered results below our expectations. Revenue, Ebitda and profit after tax declined by 12%, 32% and 50% YoY respectively. The specialty chemicals business continues to face headwinds from inventory rationalization by certain key customers.

The fluorochemicals part of the business was impacted by both volume and price declines led by Chinese dumping, off season and lower demand from industrial chemicals.

SRF's revenue for the packaging films business declined by 9% YoY owing to pricing pressures amid commissioning of several new lines leading to a supply glut.

We lower our FY24/FY25/FY26 profit after tax by 21%/15%/12% to factor in lower growth of the chemicals and packaging segments.

We maintain our 'Buy' rating on SRF with a revised sum of the parts target of Rs 2,770.

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