Shares of Indian chemical maker SRF Limited climbed 4.2 percent on Tuesday, January 31, after the company reported a better-than-expected third-quarter profit driven by strong demand in its chemical business.
The consolidated net profit of the company rose marginally to ₹510.90 crore in Q3 FY23 as against ₹505.54 crore posted in Q3 FY22.
During Tuesday’s trade, the stock opened at a price of Rs. 2,190 per share against the previous close of Rs. 2,144.75 per share and grew further during the early trading session to touch an intraday high of Rs. 2,235.75. However, it failed to hold onto this rally and was trading at ₹2,176.20 apiece, up by 1.47 percent, at 12:20 p.m. on the BSE.
The stock touched a 52-week high of Rs. 2,865 on September 14, 2022 and a 52-week low of Rs. 2,002.20 on July 06, 2022, indicating that at the current level, the stock is trading 8.69 percent above its 52-week low and 24 percent below its 52-week high.
The stock has shown a negative growth of 11.3 percent in the last six months. Along similar lines, it has declined by 9.68 percent in the last one year. However, the stock has yielded a strong return of nearly 500 percent in the last five years.
On Monday, the Gurgaon-based chemicals business informed through an official filing that its revenue rose 23 percent to 17.57 billion rupees on account of strong demand for certain key products such as fluorochemicals. The chemicals segment accounted for about 51 percent of the company's overall revenue.
SRF saw strong demand from overseas markets, higher capacity-utilization of facilities and significant cost-savings across all product streams. Strength in the fluorochemicals business helped offset weakness in its packaging films business, which had to contend with a global demand slowdown and steep energy costs in Europe, it added.
Sales of the company rose 1.66 percent to ₹3369.27 crore in the quarter that ended December 2022 as against ₹3314.14 crore during FY22.
EBITDA stood at Rs. 843.53 crore in December 2022, down 5.44 percent from Rs. 892.08 crore in December 2021. Earnings per share of the company has increased to Rs. 17.24 in December 2022 from Rs. 17.06 in December 2021.
The company also approved three projects in the December quarter, including a capex project worth 5.95 billion rupees.
The fluorochemicals business had a healthy quarter owing to higher prices of certain key refrigerant products in critical international markets and increased domestic volumes of HFCs and blends. In addition, a healthy contribution from the chloromethanes segment augmented the overall results, the company stated.
SRF is engaged in the manufacturing of industrial and specialty intermediates. The company classifies its businesses as technical textiles, chemicals, packaging films, and other businesses. The company’s subsidiaries include SRF Industries (Thailand) Ltd., Thailand packaging films and South Africa packaging films.
According to a Mintgenie poll, 25 analysts on an average have a ‘BUY’ call on the stock.