SRF stock: Growth in margins will come from speciality chemicals segment

In the fluorochemicals business, the company, a domestic leader in refrigerant gases, will benefit from rising use of air conditioners and refrigerators

The SRF stock, up 4 per cent on Tuesday, continues to add to its gains in the last couple of weeks on expectations of a sales recovery in its speciality chemicals business segment.

The segment, which accounts for about 38 per cent of consolidated segment-level profits, was facing a slowdown on account of weak demand, delay in product launches and outsourcing orders because of global consolidation in the business.

Ongoing expansion, coupled with weak revenues, meant margins came down to 17 per cent in the third quarter (Q3) of FY18 from 28 per cent in Q3 FY16. Some of the