SRF Limited - Q4 & FY26 Earnings Analysis

Performance Highlights

SRF Limited reported consolidated FY26 revenue of ₹15,787 crore, up 7.4% year-on-year, with PAT rising 46.7% to ₹1,835 crore and EBITDA margin expanding 330 basis points to 23.5%, representing a clear beat on both profit and operating efficiency metrics. Diluted EPS for FY26 reached ₹61.91, up from ₹42.20 in FY25, reflecting strong bottom-line conversion as interest costs fell 26% to ₹278 crore and net debt-to-EBITDA improved to 1.02x.

The Chemicals Business was the primary earnings engine, generating FY26 EBIT of ₹2,263 crore on revenue of ₹7,779 crore at a 29.1% EBIT margin, up from 24.9%, driven by robust HFC volumes and realizations alongside specialty chemicals pipeline progress. Performance Films & Foil recovered meaningfully, with EBIT rising 39.2% to ₹508 crore as BOPET, BOPP, and Aluminium Foil margins improved, while Technical Textiles remained under pressure with FY26 EBIT declining 20.1% to ₹190 crore on a 7.5% revenue contraction.

Management Outlook and Forward Catalysts

Management approved a ~₹2,300 crore capacity expansion at its Odisha site covering a 20,000 MTPA HFO facility and a 30,000 MTPA HF plant, signalling continued conviction in fluorochemicals growth and positioning the business for next-generation refrigerant demand under the Kigali Amendment. The indefinite deferral of the ~₹490 crore Indore BOPP facility reflects disciplined capital allocation given persistent competitive pressures in films.

Bulls will focus on HFC capacity additions, PTFE ramp-up with key global account approvals, and specialty chemicals pipeline recovery in pharma and agro segments as the central re-rating catalysts, while bears will monitor Chinese pricing aggression across the specialty chemicals value chain, geopolitical-driven raw material volatility in films, and the pace of Technical Textiles margin recovery as the key risks heading into FY27.