SRF Q2 Results Review – Chemical Segment Grows Despite Challenging Macro: Yes Securities


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SRF Ltd.’s Q2 FY23 Ebitda at Rs 7.7 billion (up 14% YoY; down 23%), missed our and street estimates on weaker than estimated earnings in technical textiles business and packaging films business, even as chemical business stood better than expectations.

Chemical business revenue at Rs 18.3 billion registered a growth of 62% YoY and 6% QoQ driven by growing demand for existing and new products.

However, weaker demand for nylon tyre chord fabric impacted technical textile business revenue leading to a 16%YoY & 18% QoQ decline to Rs 4.7 billion and start of new BOPET lines globally led to a 5% QoQ  drop inpackaging films business revenue to 13.3 billion.

In addition, inventory loss of ~Rs 130‐140 million, impacted segment margins as well. With a spend of Rs 12.5 billion in the H1 FY23, SRF has already commissioned MMP4, and a captive power plant, and remains on track for investment of Rs 30 billion in FY23.

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