SRF continues downward trend with fifth consecutive profit decline

SRF Q4 earnings: Chemicals and polymers manufacturer SRF reported a decrease in profit for the fifth consecutive quarter, primarily impacted by sustained weak demand in its core chemicals business.

SRF's chemical segment, which encompasses specialty chemicals, fluorochemicals, and agrochemicals, represents a significant portion of the company's quarterly revenue.

The chemical industry has been grappling with challenges such as high inventory levels and destocking, resulting in continued pressure on both volume and margins for companies like SRF.

The company cited inventory rationalization and pricing pressure from low-cost Chinese products as contributing factors to its weakened performance. Additionally, SRF's fluorochemicals business suffered from China's dumping of refrigerants in both Indian and international markets.

A similar trend was observed in peer company Coromandel International, which reported lower fourth-quarter profit due to subdued demand for fertilizer and nutrient chemicals.

In terms of financials, SRF's consolidated net profit declined by nearly 25 per cent to Rs 422 crore in the quarter ending March 31. Revenue from operations also saw a decline of 5.5 per cent to Rs 3,570 crore, with the chemical business segment experiencing a significant slide of 13.6 per cent.

Ashish Bharat Ram, chairman and managing director of SRF, expressed optimism about a reasonable recovery in the chemicals business during the fourth quarter. He anticipates that this recovery will gain momentum in the second half of fiscal year 2025.

(With Reuters inputs)