SRF Limited, a leading chemical giant, announced its Q4 results today, showcasing a strong performance across key financial metrics. The company reported a 25% year-on-year (YoY) jump in net profit to ₹526 crore for the fourth quarter, which is double the profit posted in the previous quarter. Revenue for the quarter also witnessed significant growth, rising 21% YoY to ₹3,313 crore. The company's EBITDA surged by 38% YoY, reflecting robust operational efficiency, and margins improved notably to 22.2%, up from 19.5% in the same period last year.
Shares of SRF Limited are currently trading at an all-time high, reflecting investor optimism following this strong turnaround. The most crucial aspect of SRF’s performance this quarter is the impressive recovery in its core chemical business. The segment posted revenue of ₹2,355 crore in Q4FY25, compared to ₹1,816 crore in the corresponding period last year. This strong growth in the chemical division is a key highlight, especially since it forms the backbone of SRF’s overall operations.
In contrast, the company’s textile business has not shown much improvement. It posted ₹458 crore in revenue during Q4FY25, slightly lower than ₹468 crore in the same period last year. However, this segment is not a major concern for the company as the focus remains on the chemical division’s performance.
The current results mark a potential turning point for SRF, which had been going through a challenging phase between June 2022 and September 2024. During this period, the company experienced a dramatic decline in profitability due to rising inflation and higher raw material prices. For instance, SRF’s profit stood at ₹842 crore in the June 2022 quarter but fell sharply to ₹284 crore by the September 2024 quarter—a decline of more than 60%. As a result, the company’s stock delivered a flat return during this period, despite having generated a remarkable 300% return in just two years from March 2020 to June 2022.
This latest quarter’s performance suggests that the chemical industry, and SRF in particular, may be witnessing signs of a turnaround. The company’s improved margins and strong revenue growth in its chemical business support this outlook. Remarkably, SRF is the only stock in the chemical sector that did not fall more than 30% during the recent inflationary peak, while other chemical stocks witnessed a decline of over 40% from their respective highs.
Commenting on the results, Chairman and Managing Director Bharat Ram stated, “We have finished the year on a very strong note, supported by seasonal factors. That aside, we will go into the new financial year carrying this momentum. However, we are dealing with a very volatile global economy at the moment and while we remain cautiously optimistic about the year ahead, the risks remain.”
Navin Fluorine, another key player in the specialty chemical sector and a peer of SRF, has posted impressive Q4FY25 results, further indicating that a recovery in the chemical industry is underway. The company reported revenue of ₹701 crore, marking a 16.4% year-on-year growth and a 15.6% rise quarter-on-quarter. EBITDA for the quarter stood at ₹179 crore, up 62.4% YoY and 21.3% QoQ, reflecting strong operational performance. Profit after tax (PAT) rose to ₹95 crore, registering a 34.9% YoY and 13.6% QoQ increase.
One of the key highlights of the quarter was the significant improvement in margins. Navin Fluorine posted EBITDA margins of 25.5% in Q4FY25, compared to 24.3% in Q3FY25 and 18.3% in Q4FY24. This consistent upward trend in margins clearly signals a broader recovery in the chemical industry, which had been under pressure due to global headwinds and inflationary challenges over the past couple of years. The results of both SRF and Navin Fluorine now point toward a strong comeback for the sector.
