SRF Q3 bottom-line soars 41 per cent; declares dividend

Gurgaon based manufacturer of technical textiles, chemicals, industrial yarns and polymers posted its Q3FY16 results after the market hours yesterday. SRF's net profit for the quarter surged 41 per cent aided by higher other income, and lower interest expenses. However, sales declined marginally for the quarter.

SRF’s consolidated revenue from the quarter stands at Rs 1097.4 crore as against Rs 1113.2 crore attained in the corresponding quarter of the previous fiscal, representing a de-growth of 1.42 per cent on a yearly basis. Sales revenue for the quarter in review was down due to the significant reduction in the commodity prices, which brought down the realisations. Chennai floods too played a role in impacting the sales negatively.

On operational front EBITDA for the quarter in review was at Rs 227.17 as compared to Rs 98.1 crore achieved in the same period of the last fiscal, demonstrating a growth of robust 131.57 per cent. Operational efficiency for the quarter in consideration was aided by softening of commodity prices. Raw material as a percentage of total sales revenues saw a drastic decline of 722 basis points to 48.90 per cent on a Y-O-Y (year on year) basis. Power and fuel expense as a percentage to revenue also saw a marked decline, as it shrank by 394 basis points to 8.50 per cent, hence aiding the company in earning operational profits. Margins for the third quarter also increased by a whopping 1189 basis points to 20.70 per cent primarily due to cost benefits. Profit after tax for the December quarter increased by 41 per cent to Rs 100.68 crore as against Rs 71.4 crore in the same period last fiscal.

Segment wise results for Q3 saw the packaging films business report a 115 per cent increase in its operating profit from Rs 20 crore to Rs 43 crore, a over 6 per cent increase in segment revenue. Chemicals and polymers business recorded 40 per cent increase in operating profit.

In a separate development, SRF’s Board of Directors also approved an interim dividend at the rate of 50 per cent amounting to Rs 5 per share.

Responding to the Q3 numbers, SRF scrip opened in green to touch an intra-day high of Rs 1160 i.e. up more than 2 per cent.