BLOG
SRF Q1 numbers in line; upbeat guidance for key segments maintained
What's Buzzing
SRF reported strong topline growth led by all segments, while OPM missed owing to lower than expected margins from Chemical segment.
Context
SRF reported top-line growth of 44% YoY to 3894.7 crores against our expectations of 3583.9 crores led by strong performance from all segments. The revenue from chemical was up by 55% YoY to 1722.4 crores, while the same from technical textile increased by 16% YoY to 571 crores. The revenue from packaging film and other segments stood at 1496 crores (up 44%) and 105.6 crores (up 97% YoY) respectively. OPM for the quarter expanded by 60bps YoY to 25.5% resulting into EBITDA growth of 48% YoY to Rs 995 crores against our estimate of 945.1 crores. The expansion in operational performance is on account of better gross margins (52.3% v/s 50.7% in Q1FY22). PAT increased by 54% YoY to Rs 608 crores against our estimates of 590.1 crores
Perspective
Since the management's endeavor has persisted to efficiently use the cash flows towards the value added product portfolio, it has been able to generate decent return ratios over the last few years. Focused capex towards speciality chemicals keeping in mind higher consumption of fluoro-compounds across agrochemical and pharma to drive growth ahead. Moreover, Maiden foray into polytetrafluoroethylene (PTFE) through backward integration of R22 to diversify business risk, to a certain extent. Prudent and measured strategy to increase presence across other fluoropolymers is likely to enhance revenue visibility over the medium to long run. We expect better FCF generation and thereby allocation towards high RoCE generating business to assist the company to demand better valuations in the long run
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.