SRF (SRF) Q4 96/97 earnings summary

Executive summary

• FY1996-97 sales reached Rs 687.29 crore; core nylon and fluorochemicals businesses grew, while short-term debt pressure strained cash flow and profit performance.

• Strategic focus shifted to industrial yarns, fabrics and fluorochemicals, supported by the CEAT tyre-cord plant acquisition and Jebel Ali production facility.

Financial highlights

• Sales were Rs 687.29 crore versus Rs 604.05 crore in FY1995-96; profit before interest, depreciation and tax was Rs 177.56 crore versus Rs 145.80 crore.

• Profit before extraordinary items was reported at Rs 10.85 crore; net profit was Rs 32.65 crore and EPS Rs 3.62.

• Proposed equity dividend was 10%; preference dividends included interim payments on specified cumulative redeemable preference shares.

Outlook and guidance

• Bus and truck tyre demand, the dominant nylon tyre-cord market, was expected to grow 7% in FY1997-98, with higher growth anticipated in later years.

• Polyester-film profitability was expected to improve in FY1997-98 as selling prices firmed and packaging demand supported capacity utilisation.

• Overseas tyre-cord subsidiary anticipated significant bulk orders in the coming year after customer approvals; commercial operations had used 25% of installed capacity in its first full year.

• An eco-friendly refrigerant substitute developed with IICT was expected to become available for commercial use; work continued on a product response to Montreal Protocol phase-outs.