India's SRF posts fifth straight drop in quarterly profit

SRF

07/05/2024 11:41

BENGALURU, May 7 (Reuters) - Indian chemicals and
polymers maker SRF  SRFL.NS  posted a drop in profit for the
fifth quarter in a row on Tuesday, hurt by sustained weak demand
in its mainstay chemicals business.
    SRF's chemical business, which consists of specialty
chemicals, fluorochemicals and agrochemicals among others,
contributes half the company's quarterly revenue.
    
    WHY IT'S IMPORTANT
    The chemical industry has been grappling with high inventory
and destocking for the past few quarters, leading to continuous
pressure on volume and margins, according to analysts.
    SRF said that besides inventory rationalization, prices were
also under pressure due to low-priced products from China. It
said its fluorochemicals business was hit by China's dumping of
refrigerants in India and the international markets.
    Peer Coromandel International  CORF.NS  also reported a
lower fourth-quarter profit due to subdued demand for its
fertilizer and nutrient chemicals.
    
    BY THE NUMBERS
    SRF's consolidated net profit fell nearly 25% to 4.22
billion rupees ($50.6 million) in the quarter ended March 31.
    Revenue from operations fell 5.5% to 35.7 billion rupees,
with revenue from its chemical business segment sliding 13.6%.
    
    KEY QUOTES
    "We have seen a reasonable recovery in our chemicals
business in the fourth quarter ... (we) believe that this
recovery will pick up pace in the second half of fiscal 2025,"
Ashish Bharat Ram, chairman and managing director, said.
    
        
    GRAPHIC   
 
 ($1 = 83.4770 Indian rupees)

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January to March Stock Performance of SRF and Peers    https://tmsnrt.rs/4bqZ28c
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 (Reporting by Ashish Chandra in Bengaluru; Editing by Savio
D'Souza)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))