SRF Ltd.'s third-quarter profit and Ebitda may fall mainly because of a decline in revenue due to continued weakness in the packaging industry.
The specialty chemical's net profit may fall 35% year-on-year to Rs 332 crore in the quarter ended December, according to Bloomberg consensus estimates. Ebitda is seen declining 21% year-on-year.
Revenue to fall 5.3% to Rs 3150 crore.
Ebitda to fall 21% to Rs 654 crore.
Margin to contract to 20.5% vs 24%.
Net profit to fall 35% to Rs 332 crore
Kotak Institutional Equities expects a weak quarter due to deferrals of specialty chemical orders from customers and softness in the refrigerants business as well.
The brokerage firms do not expect any meaningful pickup in the packaging film segment, which continues to grapple with industry overcapacity.
While IDBI Capital expects revenue to decline by 16% year-on-year owing to weakness in the chemicals and packaging business. However, it expects a sequential improvement in chemical performance in the third quarter.
Systematix Institutional Equities sees continued weakness in the packaging vertical that may pose significant challenges from a cyclical downturn, owing to higher domestic and international capacities and the overall economic slowdown globally. The chemicals vertical too could witness lacklustre performance due to inventory rationalisation and sliding refrigerant gas prices, it said.
Chemicals business unit to register strong traction along with a better value-added product mix, according to HDFC Securities.
Chemicals segment margins will remain under pressure owing to operating leverage created by revenue weakness, according to Kotak Institutional Equities. Overall, the brokerage expects Ebitda to fall 9% sequentially and 32% year-on-year.
IDBI Capital expects margins to come in at 22% and Ebitda to decline 22% in line with the decline in revenue.
Systematix Institutional Equities expects the Ebitda margin to fall 401 basis points year-on-year but rise 31 basis points sequentially to 20%.
The company's net profit is likely to fall 14% sequentially and 50% on year, according to Kotak Institutional Equities.
Systematix Institutional Equities expects net profit margin to decline 533 basis points to 9.4% year-on-year and 7 basis points sequentially.
IDBI Capital sees profit after tax to decline by 24% YoY
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