India: SRF reports lower net profit in Q2 ’13-14

Company Performance

India: SRF reports lower net profit in Q2 ’13-14

SRF Limited, a multi-business entity engaged in the manufacture of chemical based industrial intermediates, reported a net profit after tax (PAT) of Rs 48 crore during the second quarter of 2013-14, sequentially an increase of 9 percent over Rs 44 crore recorded during the previous quarter ended June 2013.

The prevailing economic slowdown coupled with forex loss against forex gain of last year, however, caused 37 percent decline in the company’s PAT during the second quarter of the current financial year over the corresponding period last year (CPLY) when it had posted a PAT of Rs 75 crore. The company also absorbed a loss of Rs 6.54 crore during the period against a gain of Rs. 41.54 crore during CPLY on account of foreign exchange fluctuations. SRF’s revenue, however, increased by 5 percent from Rs 804 crore to Rs 844 crore during the same period year-on-year.

Reflecting on the financial performance of the company, Ashish Bharat Ram, Managing Director, SRF Limited, commented, “In a weak economic environment, the company has managed to do well. Operations across the board performed better than expectations. Having said that the economic conditions remain extremely challenging with low visibility. ”

Q2 Segment Results

While the segment revenue for the Technical Textile s Business grew by 4% from Rs 435 crore to Rs 453 crore, its operating profit increased by 43% from Rs 33 crore to Rs 47 crore during the quarter ended September 2013 over CPLY. The Chemicals & Polymers Business recorded a marginal increase in its segment revenue from Rs 206 crore to Rs 208 crore. The operating profit of the Chemicals & Polymers Business, however, declined by 17% from Rs 42 crore to Rs 35 crore during July-September 2013.