SRF Ltd, a prominent chemicals maker, disclosed a 24% year-on-year decline in consolidated net profit, amounting to Rs 422 crore for the fourth quarter of FY24. The company attributed this downturn to various factors impacting its revenue and operating performance.
In comparison to the previous corresponding quarter, where SRF recorded a net profit of Rs 562 crore, the company reported a significant decrease, as outlined in its regulatory filing. Additionally, its revenue from operations experienced a 5% dip, falling to Rs 3570 crore from Rs 3778 crore in the previous year.
At the operating level, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) plummeted by 25% to Rs 696 crore compared to Rs 932 crore in the previous fiscal year. The EBITDA margin stood at 19.5%, a decline from 24.6% in the same period a year ago.
Ashish Bharat Ram, Chairman and Managing Director of SRF, acknowledged the weak overall performance but expressed optimism regarding a reasonable recovery in the Chemicals Business during the fourth quarter, as anticipated. He remarked, “We believe that this recovery will pick up pace in the second half of FY25.”
The Chemicals Business segment witnessed a decline of 14% in its revenue, dropping from Rs 2,102 crore to Rs 1,816 crore during Q4FY24 compared to the corresponding period last year. The Specialty Chemicals Business faced challenges due to inventory rationalization by key customers, although it showed improvement compared to Q3FY24.
Moreover, pricing pressure on intermediate products due to increased capacity in China and the dumping of refrigerants in India impacted the performance of the Fluorochemicals Business, affecting both pricing and volumes.
The sluggish growth in the agrochemical and pharmaceutical industries further dampened demand for key industrial chemicals. However, SRF noted positive developments in increasing market share in the Dymel/propellant vertical in domestic and international markets, along with entering new geographies and broadening its customer base.
SRF, established in 1970, is a multi-business chemicals conglomerate involved in the manufacturing of industrial and specialty intermediates. With a diversified portfolio encompassing chemicals, packaging films, technical textiles, and other business verticals, the company aims to navigate through current challenges and capitalize on future growth opportunities.