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SRF Q1 analysis: Chemicals company SRF kicked off FY26 on a strong note, reporting a 71.5 per cent year-on-year (Y-o-Y) jump in consolidated net profit to ₹432.3 crore in Q1FY26, up from ₹252 crore in the year-ago period. The upbeat numbers were backed by healthy performance in the Chemicals and Performance Films & Foil businesses, despite some pockets of weakness in Technical Textiles and Other segments.
Revenue for the quarter rose 10.3 per cent Y-o-Y to ₹3,819.6 crore, while Ebitda surged 37.8 per cent Y-o-Y to ₹831 crore, improving margins from 17.4 per cent to 21.7 per cent. The margin expansion reflects better operating leverage, strategic pricing, and an improved product mix.
SRF chairman and managing director Ashish Bharat Ram said the company had a good start to the year despite a weak summer and global uncertainties. “We remain cautiously optimistic for the rest of the year,” he said, highlighting robust capex plans that include two fresh investments including ₹250 crore for a new agrochemical intermediate facility at Dahej and ₹490 crore for a state-of-the-art BOPP film plant in Indore.
The board of directors also approved an interim dividend amounting to ₹4 per share.
Segment-wise performance
The Chemicals Business – a key earnings driver – posted a 24 per cent rise in revenue to ₹1,839 crore and a sharp 64 per cent jump in operating profit to ₹503 crore. The Specialty Chemicals segment witnessed strong demand for agrochemical intermediates, while the Fluorochemicals business benefited from firm pricing in the export market despite domestic softness. Management commentary indicates that demand tailwinds in both areas are likely to persist, with new product launches set to gain momentum in FY26.
The Performance Films & Foil Business also had a strong quarter, reporting its highest-ever packed production. Revenue grew 6 per cent Y-o-Y to ₹1,418 crore and operating profit soared 62 per cent to ₹140 crore, supported by higher realization and volume gains. Notably, a fire at a rival firm’s facility pushed up BOPP prices, which SRF capitalized on. The newly announced ₹490 crore expansion in this segment is a signal of confidence in demand sustainability.
However, the Technical Textiles Business disappointed, with revenue falling 11 per cent Y-o-Y and operating profit plunging 44 per cent. Lower demand for Nylon Tyre Cord Fabric and price pressures in the Belting Fabrics segment -- primarily due to dumping from China -- were key drags. The Other Businesses segment also underperformed, with revenue and profits declining 25 per cent and 43 per cent respectively. ALSO READ | What to do with Cyient shares after Q1 results? Analysts decode what's next
Analyst views
Brokerages remain constructive on SRF’s long-term story despite mixed performance across segments.
Emkay Global noted that the Q1 Ebitda was in line with expectations, buoyed by better refrigerant pricing and recovery in specialty chemical volumes. It maintained an ‘Add’ rating with a target price of ₹3,250, while raising FY26 capex guidance to ₹2,500 crore from ₹1,200 crore in FY25. The firm expects continued strength in chemicals, particularly exports, to drive growth.
Nuvama Institutional Equities, though slightly disappointed with chemicals segment profitability, maintained a ‘Buy’ rating and raised its target price to ₹3,622 (from ₹3,393), rolling forward to FY28 estimates. It highlighted margin improvements and lowered interest and depreciation costs as positives.
That said, SRF’s Q1FY26 results point to a fundamentally resilient business, underpinned by strength in high-margin specialty chemicals and performance films. While some segments remain under pressure, strong capex commitments and strategic product expansion indicate long-term growth visibility.
