SRF Ltd. Q2 FY26 Financial Performance & Business Update

The company reported robust year-over-year (YoY) growth in operating profit and significant margin expansion, though consolidated performance missed consensus street estimates. Consolidated Financial Highlights (YoY) Revenue: Grew 6.3% YoY to ₹3,640.2 crore. (Estimate: ₹3,852 crore). EBITDA: Increased 44% YoY to ₹774.2 crore. (Estimate: ₹837 crore). EBITDA Margin: Expanded significantly by 550 basis points to 21.2% from 15.7% last year. (Estimate: 21.7%). Net Profit: Stood at ₹388 crore. (Estimate: ₹454 crore). Segmental Performance Analysis Chemicals Business: This segment was the primary growth engine, with revenue increasing 23% YoY to ₹1,667 crore. Operating profit for the business nearly doubled, supported by record sales volumes for refrigerants within the fluorochemicals division. Revenue remained relatively flat at ₹1,408 crore (vs. ₹1,421 crore YoY). Despite flat revenues, the segment’s operating profit grew 44% YoY, indicating strong margin expansion in the value-added product segment. Technical Textile Business: This segment faced significant external pressures. Revenue declined 11% YoY to ₹474 crore, and operating profit fell 41%. Management attributed the poor performance to aggressive import pricing of fabrics from China and subdued demand for Polyester Industrial Yarn. Management Outlook: Chairman and Managing Director Ashish Bharat Ram acknowledged the "very uncertain global environment" but affirmed the company remains "confident of a good finish to the year." Capex Enhancement: SRF has increased its capital expenditure from ₹595 crore to ₹745 crore. This is aligned with the company's strategic collaboration with The Chemours Company for the manufacture and supply of fluoropolymers, with a final completion target of December 2026. Leadership Transition: Mr. Rahul Jain, President and CFO, will be stepping down to pursue other opportunities. The company is actively identifying a successor to ensure a smooth transition.