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SRF Optical tilt towards remunerative businesses in lieu of commoditized one

ICICIdirect Research 08 May 2026 DISCLAIMER

More than results, the important takeaway from SRF results was expansion of capex towards next generation and environmentally friendly Hydrofluoroolefin (HFO) gases and trimming down of capex towards commoditized packaging business. SRF has indefinitely deferred its ₹490 crore BOPP film capex at Indore, reallocating capital towards the HF value chain wherein it has increased its capex for the HFO project to ₹2,285 crore (from ₹1,100 crore earlier), expanding the planned capacity to 20ktpa (vs 10ktpa previously). The project, is targeted for completion by February 2028, and is expected to enhance overall HFC capacity beyond 65ktpa.
On the results front, Revenues of ₹ ₹4,532 crore, up ~8% YoY. Segment wise, the flagship Chemicals business (53% of the revenues) reported a growth of 4% YoY to ₹2,448.3 crore and the muted growth was attributable to a slowdown in specialty chemicals due to aggressive Chinese dumping, even as fluorochemicals delivered robust performance. Meanwhile, Performance films (35% of revenues), was up 13% YoY to ₹1,595 crore and Technical Textiles (10% of revenues) reported an uptick of 5.3% to ₹482 crore.
Going forward, growth will also be supported by the partnership with US based Chemours for fluoropolymers and fluoroelastomers, which is a high margin project, likely to commence by late FY27. Moreover, the partnership also has deeper long-term collaboration potential with the company. Given, these growth parameters, the management has guided for a healthy revenue growth of 15–20% for the Chemicals segment to be mainly driven by Fluorochemicals.
Overall, we have a positive stance on the company, given the robust outlook in the chemicals business which accounts for 75% of the overall EBIT. We have BUY rating on the stock with TP of ₹3,235 per share.

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