SRF falls 8% on disappointing Q1 results

The stock dipped 8% to Rs 1,420, trading close to its 52-week low of Rs 1,352 hit on Nov 18, 2016

SRF  slipped 8% to Rs 1,420 on BSE in intra-day after the company’s consolidated net profit declined 33% year-on-year (YoY) to Rs 104 crore in June quarter (Q1FY18), due to higher raw material cost. The company had profit of Rs 155 crore in the same quarter year ago.

SRF said the decrease in net profit was mainly on account of subdued commodity prices, channel destocking during the transition to the Goods and Services Tax (GST) regime and strengthened rupee.

Net sales during the quarter under review increased by 6% to Rs 1,272 crore from Rs 1,195 crore in the corresponding quarter of previous fiscal.  Raw material cost rose 25% to Rs 712 core on YoY basis.

Analysts on an average had expected profit of Rs 110 crore on net sales of Rs 1,299 crore for the quarter.

“The first quarter’s results of FY18 have been subdued due to headwinds in the form of sharp rupee appreciation against the dollar and transitional issues related to GST. We expect the environment to remain tough in the near future with growth expected to revive only by the fourth quarter of this FY,” said Ashish Bharat Ram, managing director of SRF.

At 11:27 am, the stock was down 6% at Rs 1,455, as compared to 0.41% decline in the S&P BSE Sensex. A combined 823,046 shares changed hands on the counter on BSE and NSE so far. It was trading close to its 52-week low of Rs 1,352, touched on November 18, 2016.