SRF (SRF) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 gross operating revenue was INR 3,424 crore, up 8% YoY, with PAT at INR 201 crore; H1 revenue was INR 6,888 crore, up 6%, and PAT at INR 454 crore.

• Profit after tax declined 33% YoY in Q2 FY25, with margins under pressure across segments.

• EBITDA margin contracted to 17.3% in Q2 FY25 from 21.2% a year ago; H1 FY25 margin at 18.0%.

• Segmental performance was mixed: Packaging Films saw strong revenue growth, while Chemicals and Others declined.

• Unaudited consolidated and standalone financial results for the quarter and half year ended September 30, 2024, were approved by the Board on October 22, 2024.

Financial highlights

• Q2 FY25 EBITDA fell 11.9% YoY to ₹594 crore; PAT at ₹201 crore, down from ₹300.8 crore; basic and diluted EPS at ₹6.79, down from ₹10.15.

• Chemicals business revenue declined 5% YoY in Q2; Packaging Films grew 27% YoY to INR 1,421 crore; Technical Textiles revenue grew 6% YoY to INR 536 crore.

• Finance costs increased YoY, but borrowing costs are expected to decline as global interest rates soften.

• Net debt to equity stood at 0.35 and net debt to EBITDA at 1.45 as of FY24; debt-equity ratio (consolidated) was 0.44 as of September 30, 2024.

• Consolidated operating margin for Q2 FY25 was 11.02%, down from 15.55% in Q2 FY24.

Outlook and guidance

• Management anticipates gradual demand recovery in Q3 and significant improvement in Q4, especially in chemicals.

• Margin guidance for chemicals remains at plus/minus 2-3% of FY24 annual margin, with positive changes expected in Q4 FY25.

• Agrochemicals expected to improve in H2 FY25; new pharma intermediates and ramp-up of new facilities to drive growth.

• Packaging Films to face continued margin pressure in BOPET; BOPP stable; aluminium foil to contribute in H2.

• Commercial paper program remains rated CRISIL A1+ and IND A1+; all due commercial papers repaid during the quarter.