SRF Ltd. Soars Despite Pandemic Blows, Thanks to the Chemicals and Packaging Films Sector

SRF Ltd., a multi-business entity engaged into manufacturing of Fluorochemicals, specialty chemicals, textiles and packaging films, has recently reported an impressive June quarter. Despite a significant slump in its Fluorochemicals and Tyre Cord fabric sales due to limited buying from the automotive sector, the shares of the company rose by 20% within the year, reporting a 52-weeks hike on Tuesday.  The shares soared soon after the company got approval for setting up a Chloromethanes facility in Gujarat at an investment of INR 315 crores. SRF also commissioned a new specialty chemicals unit in Gujarat this week and has recently expanded its packaging films capacity in Europe. About the June quarter, although the company’s revenue dropped by 12.4% as compared to the previous year’s, the strongly performing chemicals division helped it to grow its operating profit by 6.3%. Revenue from the division registered a growth of 16.9% in Q1FY21. The company has also registered better margins from its packaging films business with most of the plants operating efficiently as the segment largely encompasses the essential goods category. Looking opportunistically at the outshining specialty chemicals sector, SRF is confidently looking forward to expanding its existing capacities. SRF is also looking forward to double its chemicals manufacturing capacity by January-end 2022. Due to widened demand-supply gap and firming feedstocks, local Fluoropolymers players introduced upward revision in domestic PTFE (Polytetrafluoroethylene) prices in the quarter ending June. Ex-Depot Vadodara price for PTFE General Moulding grade was closed around USD 5720 per MT while that of PTFE Fine-Cut grade was assessed at USD 8650 per MT by the end of the quarter.