Company Update : SRF Ltd By Motilal Oswal Financial Services Ltd
Operating performance above estimates
* SRF reported total revenue of INR43.1b (in line) in 4QFY25, up ~21% YoY. Chemical/Packaging film revenue grew 30%/19% YoY to ~INR23.6b/INR14.1b, while Technical textile revenue declined 2% YoY to INR4.6b.
* EBITDA margins expanded by 330bp YoY to 23.2% (est. 21.4%).
* As a percentage of sales, RM costs stood at 51.8% (vs. 51.4% in 4QFY24), employee costs at 6.4% (vs. 6.9%), power costs at 7.7% (vs. 9.2%), and other expenses at 10.9% (vs. 12.6%).
* EBITDA stood at INR10.0b (est. INR8.9b), up 41% YoY.
* EBIT margin in Chemical biz/Packaging film business expanded by 440bp/460bp YoY to 31.8%/7.4%, while Technical Textile EBIT margin contracted by 610bp YoY to 8.7%.
* Adj. PAT grew 30% YoY to INR5.7b (est. INR4.7b) -- adjusted for forex loss of INR451m in 4QFY25.
* In FY25, revenue/EBITDA grew 12%/7% YoY to INR147b/INR28b, while adj. PAT declined 3% to INR13.7b.
* During the quarter, the Specialty Chemicals Business demonstrated strong performance, driven by positive momentum in recently launched products and a pick-up in demand for certain key agrochemical intermediates. The costcompetitive pricing strategies, along with robust export market performance, further contributed to revenue growth.
* In the Performance Films & Foil business, margins improved for both BOPET and BOPP due to increased capacity utilization, driven by rising demand.
* During the quarter, demand for Polyester Tyre Cord Fabric and Polyester Industrial Yarn remained robust, while volumes of Nylon Tyre Cord Fabric were flat.
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