Thread by @ValueEducator

#SRF Q3 Concall Highlights 🧪🧪

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Operational Highlights

1. Revenues for the quarter stood at ₹3,345.9 as against ₹2146.4 Cr in Q3FY21, translating growth of 55.9% YoY

2. EBITDA margins stood at 25.7%

Revenue breakup

Chemical business-42.6%, Packaging films-38.1%, Technical textile- 16.1% and others-3.2%

Business Highlights

1. Launched new pharma intermediate during the quarter and successfully conducted campaigns for 2-3 upcoming products.

2. Achieved highest ever production in key products and are constantly enhancing capacity utilisation at newly commissioned facility

3. Intent to keep debt at similar levels

4. The new pharma plant will follow CGMP but are not tested yet, but largely all new plants are following that approach

5. SRF share for HFC in domestic market is 60-70% and for non-HFC it will probably be in 40-50%

6. The cycle for renewal of contracts begins in Q1 and Q2 next year

7. The volumes have gone up substantially in the US markets

Chemical

1. Segment delivered healthy performance during the period owing to incremental revenues, expansion in product portfolio and increased focus on cost of production

2. Fluorochemicals Business delivered robust performance on the account of higher prices of certain key refrigerant products in critical international markets, Increased export volumes of HFC blends and chloromethanes.

3. Capex in chemicals:Pharma Intermediates plant (PIP) at a cost of ₹190 crore; to strengthen SRF’s pharma capabilities. The new pharma plant is designed to make 2-3 different products.

4. Dedicated facility of a key agrochemical product at a cost of ₹61 crore

5. Expecting demand for refrigerant to stay healthy in the upcoming quarter with HST and R32 gaining momentum and likely to expand further.

6. Refrigerant gas demand is higher in Q4 and expect the Q4 to perform better than last year

Packaging film business

1. Business performed very well, with both the domestic and international facilities delivering robust results.

2. Volume growth owing to additional capacities in Hungary and Thailand coming on stream. Margins pressure could be anticipated as few line will come onstream in coming quarters
Higher margins witnessed in BOPP segment

Technical textile business

1. Despite weak demand for nylon triangle fabrics, textile performed well driven by volumes in belting fabrics and industrial polyester yarn segment

2. The polyester yarn segment achieved best ever results amidst challenging market situation

3. Due to slow demand in tyre or OEM industry, nylon segment is impacted by lower volumes and high input costs affecting the margins profile for the company

4. The company is constantly focusing on cost improvement and efficiency

Capex

1. SRF is investing in the aluminium foil segment to create business adjacencies keeping in mind growth as a core strategy, at a new site in Jaitapur, Indore, India at an approximate cost of ₹425 crore

2. The plant is expected to commercialise in next 20 months i.e. around Sep-Oct 2023

2. Asset turn will range from 1.75-2X

3. Total capex for the year is ₹1900-2000 Cr of which:
₹1600- ₹1700 Cr to be spent on ongoing projects, additionally ₹400- ₹500 Cr capex will get sanctioned during FY23. So FY23 capex will range in ₹2100- ₹2200 Cr