SRF Ltd’s September quarter (Q2FY27) results reveal that pain for the specialty chemicals business has persisted. Although the management is rooting for a better H2, the Street is not fully convinced.
While the SRF stock recovered on Friday after hitting a new 52-week low of ₹2,178.30 on the National Stock Exchange on Thursday, it has declined 23% so far in CY26. In Q2, revenue rose 35% year-on-year to ₹4,904 crore, falling 3% sequentially.
Revenue in the chemicals business grew 25%, driven by a robust performance in fluorochemicals, which was backed by higher volumes and improved realizations. However, specialty chemicals remained subdued. The films & foil and technical textiles businesses fared relatively better with 51% and 25% year-on-year revenue growth, respectively.
Ebitda at ₹945 crore missed consensus estimate by 9% and the Ebitda margin contracted sequentially and annually to about 21%. In the chemicals segment, operating Ebit increased only 10%, considerably slower than its revenue growth.
Despite the pass-through of elevated input costs, there was a sharp margin contraction. This reflects pressure from specialty-chemical pricing, Chinese oversupply and higher input costs.