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SRF rallies 7%, hits record high on 57% YoY jump in Q2 net profit

EBITDA margins expanded 840 basis points to 27.7 per cent, driven by technical textiles and packaging businesses.

SRF stock | Buzzing stocks | Q2 results

SI Reporter  |  Mumbai 

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Shares of SRF rallied 7 per cent to hit a record high of Rs 4,768 on the BSE on Thursday after the company reported a strong 57 per cent year-on-year (YoY) jump in its consolidated net profit at Rs 316 crore in September quarter (Q2FY21), on the back of healthy operational performance. The stock surpassed its previous high of Rs 4,555, touched on October 30, 2020.

The company’s consolidated revenue grew 21 per cent from Rs 1,738 crore to Rs 2,101 crore in Q2FY21. EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins expanded 840 basis points to 27.7 per cent, driven by technical textiles and packaging businesses.

Going forward, the management believes margins of the packaging films business will soften. However, they are confident that the momentum in other businesses will ensure that the company has a good year.

The specialty chemicals business reported a robust performance on the back of higher capacity utilisation of dedicated and multipurpose plants, which led to better operating leverages and the expansion of overall margins. The packaging films business ,too, performed exceedingly well with expanded margins, and better capacity utilisations post the commissioning of BOPET film capacities in Thailand and Hungary.

Meanwhile, the board approved the setting up of a second BOPP film line in India at a site in Indore at an approximate cost of Rs 424 crore. The funding will mix of debt and internal accruals. The board also approved the setting up of a dedicated facility to produce 200 MT per year of P16 specialty product at Dahej, India at an approximate cost of Rs 17.5 crore.

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First Published: Thu, November 05 2020. 10:37 IST