SRF Shares Jump To Over Two-Year High After Reporting Higher Q3 Profit

Shares of SRF Ltd. rose over 2% after the company reported a jump in net profit in the third quarter of this financial year. In addition, the company also announced a dividend of Rs 3.6 apiece.

SRF saw a 7% jump in consolidated net profit to Rs 271 crore against Rs 253 crore reported in the same quarter last year. Revenue increased by 14.4% year-on-year for the three months ended Dec. 31, 2024, reaching Rs 3,491 crore.

Operating income, or earnings before interest, taxes, depreciation, and amortisation rose 9.5% year-on-year to Rs 620 crore. Ebitda margin contracted by 80 basis points to 17.7% from 18.5% in the same period the previous year.

The chemicals business saw a 7% increase in revenue, rising from Rs 1,394 crore to Rs 1,496 crore in the third quarter of this financial year, the company said in a press release. Operating profit grew 13%, from Rs 322 crore to Rs 364 crore. Despite some inventory buildup among agrochemical customers, demand gradually increased, while the fluorochemicals and chloromethane segments performed well.

The packaging films business saw a 27% increase in revenue from Rs 1,091 crore to Rs 1,385 crore, with operating profit doubling from Rs 45 crore to Rs 90 crore. However, margins in aluminium foil were under pressure due to lower-cost imports.

The technical textiles business reported an 11% revenue increase, from Rs 458 crore to Rs 510 crore, but operating profit decreased 14% to Rs 59 crore, mainly due to lower demand in the belting fabrics segment. The polyester industrial yarn segment achieved full capacity utilisation.

The other businesses segment saw an 11% decline in revenue, from Rs 114 crore to Rs 101 crore, with a 26% drop in operating profit. Currency fluctuations impacted results, with a stronger dollar affecting performance, although a weaker rupee benefits the company long-term.

As of December 2024, the company had applied for a total of 469 patents. Till date, the company has been granted 150 patents globally.

Shares of SRF rose as much as 2.57% to Rs 2,733.30 apiece, the highest level since Sept. 20, 2022. It pared gains to trade 0.01% higher at Rs 2,665 apiece, as of 10:38 a.m. This compares to a 0.55% advance in the NSE Nifty 50.

The stock has risen 19.91% in the last 12 months. Total traded volume so far in the day stood at 0.76 times its 30-day average. Relative strength index was at 67.

Out of 32 analysts tracking the company, 11 maintain a 'buy' rating, 10 recommend a 'hold' and 11 suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an downside of 12.6%.