SRF Limited has informed the Exchange about Investor Presentation
The Corporate Relationship Department, BSE Limited Ist Floor , New Trading Ring Rotunda Building, P.J. Towers Dalal Street, Mumbai 400 001
National Stock Exchange of India Limited “Exchange Plaza” Bandra-Kurla Complex Bandra (E) Mumbai 400 051
Scrip Code- 503806
Scrip Code-SRF
SRF/SEC/BSE/NSE
Dear Sir,
25.07.2023
Presentation- Earnings Call (Un-Audited Financial Results for the quarter ended 30.06.2023)
In continuation of our letter dated 19th July, 2023 informing about hosting of earning call to discuss Un-Audited financial results for quarter ended 30th June, 2023, please find enclosed Investors presentation, of the same for your reference and record.
The same is also available on the Company’s website i.e. www.srf.com
Thanking you,
Yours faithfully,
For SRF LIMITED
RAJAT LAKHANPAL Sr. VP (CORPORATE COMPLIANCE) & COMPANY SECRETARY
Encl: As above
SRF Limited
Q1 FY24 Results Presentation 25th July, 2023
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Disclaimer
regulatory changes,
Some statements in this document may be forward-looking. Such statements are subject to certain risks and uncertainties like local, political or economic developments, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks related to an economic downturn in any of the countries where SRF Limited has its manufacturing and / or commercial footprint.
oral
forward-looking
SRF Limited may, from time to time, make additional written and including communication to stakeholders. The company will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
statements,
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04
10
15
31
COMPANY OVERVIEW
Q1 FY24 RESULTS OVERVIEW
Q1 FY24 SEGMENTAL PERFORMANCE
OUTLOOK
T A B L E O F
C O N T E N T S
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01. Company Overview
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Snapshot
Exports to 90+ Countries
Operations in 4 Countries
15 Manufacturing Facilities
Close to 8,000 Global Workforce
₹ 14,870 cr. Revenue
35% Packaging
50% Chemicals
15% Technical Textiles & Others
₹ 3,708 cr. EBITDA
₹ 2,162 cr. PAT
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Note: On Consolidated basis as on 31st March 2023
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Overview - Business Profile
Specialty Chemicals •
Intermediates for AI / API / Applications
• Contract Manufacturing, Custom Research & Synthesis
Fluorochemicals • Refrigerants • Pharma Propellants • Industrial Chemicals • Fluoropolymers (Upcoming)
• Coated Fabrics • Laminated Fabrics
Chemicals
Others
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Revenue
EBIT
No of Plants
(In Rs. Crore)
(In No)
Note: On Consolidated basis as on 31st March 2023
Films for Flexible Packaging • Bi-axially Oriented
Polyethylene Terephthalate (BOPET)
• Bi-axially Oriented
Polypropylene (BOPP)
• Aluminium Foil (Upcoming)
• Tyre Cord Fabrics (Nylon
& Polyester) • Belting Fabrics • Polyester Industrial Yarn
Packaging Films
Technical Textiles
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Manufacturing Facilities
FLUOROCHEMICALS & SPECIALTY CHEMICALS 2 National Operations 1. Rajasthan, India - Bhiwadi 2. Gujarat, India - Dahej
TECHNICAL TEXTILES 4 National Operations 1. Madhya Pradesh, India - Malanpur, Bhind 2. Tamil Nadu, India - a. Manali b. Gummidipoondi c. Viralimalai
PACKAGING FILMS 4 National Operations 1. Uttarakhand, India - Kashipur 2. Madhya Pradesh, India -
a. Special Economic Zone (SEZ) b. Bagdoon, Pithampur c. Industrial Growth Centre, Pithampur
3 International Operations 3. KwaZulu - Natal, South Africa 4. Rayong, Thailand 5. Jaszfenyszaru, Hungary
LAMINATED FABRICS 1 National Operation 1. Uttarakhand, India - Kashipur
COATED FABRICS 1 National Operation 1. Tamil Nadu, India - Gummidipoondi
1 1
1
1
2a
2
2b
2c
International Operations
1 2b
2a
2c
3
4
5
South Africa Thailand Hungary
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Market Leadership Across Businesses
Specialty Chemicals
Fluorochemicals
Packaging Films
Technical Textiles
• Established relationship with
marquee customers
• Capability in scaling up pilot processes and creating value through operational excellence
• High
of
levels
customer engagement backed by strong R&D, technical service, product and quality management under one roof
• Handling complex reactions - ethylation, nitration, grignard, amination, and
halogenation, hydrogenation, diazotization, isomerization, organocatalysis, decarboxylation
• Recognized
for expertise
in developing, manufacturing and marketing innovative, superior film products
• Flexible business model, strong and loyal customer relationships with tailored solutions; NPD Lab to ensure future readiness
• Highly efficient asset base offering value added products near customer locations
• Domestic market leader in Tyre Cord manufacturing and Belting Fabrics
• 40% share in India’s Nylon Tyre Cord market. 5th largest player globally
• 2nd
largest manufacturer of Conveyor Belting Fabrics in the world
• Unique and
fully
integrated facilities extending across a wide range of refrigerants and industrial chemicals
global
• Domestic leadership in HFC’s with strong trade distribution significant market network; share of Fluorochemicals in India with scale operations • One of
global manufacturers of Pharma grade 134a/P - propellant in metered dose inhalers • Among the top manufacturers Fluorochemical products
five global key of
few
the
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Growth Levers
Focus on building leadership businesses Build and maintain market leadership in business segments
Nurture innovation through R&D Reposition portfolio towards knowledge-based products
Focus on building high-end value-added products Continue to build new competencies in the Chemicals Technology space
Greater focus on ESG initiatives • Benefit the communities where we work • Embrace diversity, equity & inclusion • Enhance focus on the 3R’s- Recycle, Reuse & Reduce • Increase consumption of green/renewable sources of energy
Build a Company known and respected for its R&D capabilities
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02. Q1 FY24 Results Overview
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Abridged Results Overview
Consolidated figures
Particulars (Rs. Crore)
Q1 FY24
Q1 FY23
% Y-o-Y
Gross Operating Revenue
3,338.4
EBITDA
EBITDA Margin (%)
Depreciation
Interest
ECF (Gain) / Loss
Profit Before Tax
Profit After Tax
Profit After Tax Margin (%)
Basic and Diluted EPS (Rs.)
731.7
21.9%
156.6
65.6
23.7
485.8
359.3
10.8%
12.12
-14.3%
-28.9%
19.8%
101.9%
-42.3%
-40.9%
3,894.7
1,029.7
26.4%
130.7
32.5
24.9
841.6
608.0
15.6%
20.51
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EPS is recalculated based on post bonus issued and paid-up capital
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Results Overview - Financial Overview
Consolidated figures
Key Financial Ratios
PARTICULARS
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
EBITDA Margin
13.59% 20.43% 22.13% 21.42% 17.69% 19.00% 20.90% 26.05% 25.30% 24.94%
PAT Margin
4.04% 8.78% 9.51% 10.87% 8.38% 8.33% 12.70% 14.26% 15.19% 14.54%
Net Debt to Equity
Net Debt to EBIDTA
1.00
0.98
0.71
0.67
0.82
0.83
0.76
0.39
0.32
0.32
3.80
2.83
1.97
2.11
3.01
2.42
2.48
1.24
0.88
0.88
Asset Turnover
0.73
0.77
0.70
0.68
0.66
0.72
0.66
0.65
0.79
0.79
Debtors Turnover
5.81
7.43
8.79
7.21
8.10
6.90
8.09
6.64
6.94
8.33
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Results Overview - Revenue Share
Revenue (Rs. Crore)
Q1 FY24
Total – 3,338.7 118.7
464.7
3.6%
13.9%
Q1 FY23
Total – 3,895.1
105.6
2.7%
571.0
14.7%
49.7%
32.8%
1,094.8
1,660.5
38.4%
1,496.0
44.2%
1,722.4
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CB
PFB
TTB
Others
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
Results Overview - EBIT Share
Q1 FY24
Total – 595.2
60.6
23.2
3.9%
10.2%
51.3
8.6%
77.3%
460.1
EBIT (Rs. Crore)
Q1 FY23
Total – 938.4
116.2
6.8
0.7%
12.4%
295.2
31.5%
55.4%
520.2
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CB
PFB
TTB
Others
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
03. Q1 FY24 Segmental Performance
Chemicals
Packaging Films
Technical Textiles
Others
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C h e m i c a
l s B u s i n e s s
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Chemicals Business - Results Update
Consolidated figures
PARTICULARS
Q1 FY24
Q1 FY23
% Y-o-Y
Segment Revenues
1,660.5
1,722.4
-3.6%
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
49.7%
460.1
27.7%
77.3%
44.2%
520.2
30.2%
55.4%
-11.6%
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Chemicals Business
Specialty Chemicals Business - Key Highlights
Inventory rationalization by customers, some PO rescheduling, currently being witnessed
Market Trends
•
•
The segment reported healthy performance through: o Sustainable efficiency improvements through technology
interventions
o Healthy growth in margin and sales over CPLY
• Ongoing projects progressing as per plan. Expected to commission over the next few quarters; likely to contribute positively going forward
•
Engagement with customers products / AIs remains strong o Launched 2 new products each in Agro and Pharma
for complex downstream
• Agrochemical companies inventory rationalization
focusing on
•
Fundamentally, India's momentum as an alternate chemicals specialty manufacturing base remains intact
• Certain key raw material prices continue to show signs of softening; still higher than their long-term average
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Chemicals Business
Chemicals Technology Group • Chemicals Technology Group
is actively engaged in the development of new process technologies
(CTG)
• Key focus on high end molecules
• Strong
internal
competencies
and
capabilities
• Equipped with
facilities and an scientists and engineers
ingenious
state-of-the-art
R&D team of
• 2 R&D centres in India – Bhiwadi, Rajasthan
and Gurugram, Haryana
• 7 new process patents granted in Q1FY24
139
Global Patents granted
408
Patents applied
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Chemicals Business
Fluorochemicals Business - Key Highlights
• Business performance was impacted due to:
o Chinese dumping across geographies due to weak local
demand
o Weak domestic summer season impacted HFCs demand o Industrial chemicals witnessed lower demand due to
stagnant pharma and agro industry
• De-stocking of HFCs to continue in the short-term. However, long term global refrigerant gas for demand outlook remains strong and sustainable
Market Trends
• Business to focus on commissioning and ramp up of ongoing
projects in FY24: o Projects close to Rs. 1,100 crore expected to be capitalised
in FY’24
o PTFE trial runs commence shortly
initiated – customer approvals to
• Mandatory installation of AC systems in truck cabins expected to bolster the domestic demand for ref gases in the future – new avenue for industry growth
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B u s i n e s s
P a c k a g i n g F i l
m
s
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Packaging Films Business - Results Update
Consolidated figures
PARTICULARS
Q1 FY24
Q1 FY23
% Y-o-Y
Segment Revenues
1,094.8
1,496.0
-26.8%
% Contribution to Revenues
32.8%
38.4%
EBIT
% EBIT Margins
% Contribution to EBIT
51.3
4.7%
8.6%
295.2
-82.6%
19.7%
31.5%
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Packaging Films Business
Key Highlights
• Business
continues
to face significant margin pressure.
Commodity prices falling leading to inventory corrections
• Hungary operations showing improvement compared to Q4
FY’23
• SRF’s VAP portfolio, customer contracts and ETDBW ensures
differentiated performance against peers
• Aluminium
foil project on track and expected to be
commissioned in Q3 FY24
Market Trends
•
lines Several BOPP & BOPET commissioned in India and globally in the recent past, some deferment / delays being witnessed
film
• Demand
scenario supply mismatch expected to continue, especially in BOPET
•
Sustainability initiatives, PCR, mono family structures, etc. likely to gain traction
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B u s i n e s s
T e c h n i c a
l
T e x t i l
e s
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Technical Textiles Business - Results Update
Consolidated figures
PARTICULARS
Q1 FY24
Q1 FY23
% Y-o-Y
Segment Revenues
464.7
571.0
-18.6%
% Contribution to Revenues
13.9%
14.7%
EBIT
% EBIT Margins
% Contribution to EBIT
60.6
13.1%
10.2%
116.2
-47.8%
20.4%
12.4%
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Technical Textiles Business
Key Highlights
•
Lower Caprolactum price impacted overall revenues
• NTCF volumes gaining traction when compared to Q4 FY23
•
Improved performance of Belting Fabrics and Polyester Industrial Yarn, with greater emphasis on high-end VAP sales
• Phase – 1 of the Solid Woven Fabric, which is a part of the
Belting Fabrics portfolio successfully commissioned
Market Trends
• Government focus on infra development
to contribute to growth
• Demand for Nylon Tyre Cord Fabric
expected to remain stable
• Domestic demand for Belting Fabrics
expected to remain strong
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O t h e r s
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Others - Results Update
Consolidated figures
PARTICULARS
Q1 FY24
Q1 FY23
% Y-o-Y
Segment Revenues
118.7
105.6
12.4%
% Contribution to Revenues
EBIT
% EBIT Margins
% Contribution to EBIT
3.6%
23.2
19.5%
3.9%
2.7%
6.8
6.4%
0.7%
242.6%
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Others - Key Highlights
Coated Fabrics • SRF continues to maintain its leadership position in the
domestic market:
o Achieved highest-ever domestic sales and EBITDA o Witnessed increased demand for all categories,
particularly VAPs
• Demand expected to be strong in the near-future
Laminated Fabrics • SRF retained its price leadership during the quarter:
o Plant operating at full capacity • Demand expected to remain stable
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SRF’s Community Engagement
• Under the Rural Education Program, summer camps were organized in collaboration with local communities and schools in 9 locations across the country
• Within the ambit of ‘Power of 5’ initiative, free health camps, oral health checkups were organized across several villages. A blood donation camp was also organized in the Nuh district of Mewat, Haryana
•
•
Launched the Microsoft Community Training Platform across 6 States under the ‘Digital Skills for ITIs and Polytechnics’ program
SRF Foundation’s Vocational Education Program is going places. 16 Students from the Dhar, Indore batch of the Basic Electrician Training Program have been successfully placed at Dhoot Transmission Pvt. Ltd.
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04. Outlook
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Outlook - Chemicals Business
Specialty Chemicals
• Current inventory rationalization seems transitory; may last for a couple of
quarters. However, customer traction still strong
• China + 1 remains intact, global customers’ de-risking theme continues
• Focus on commissioning new plants and their ramp up
• In essence, some temporary hiccups witnessed; counter-measures being
implemented
Fluorochemicals
• Industrial chemical prices may witness continued pressure
• Lower Chinese inventory levels over the next two quarters
• Strong demand outlook of HFCs
• Focus on PTFE product approvals to ensure plant ramp up
• Expect better performance in H2 FY’24, long term story remains intact
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Outlook - Packaging Films Business
• Demand
supply mismatch and pressure on margins expected to continue
• Downcycle at its peak; industry over-
capacity to taper over time
• Focus on value-added products both
in BOPP and BOPET
• Continue to focus on sustainability
initiatives and cost optimization
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Outlook - Technical Textiles Business
• Higher operating leverage and cost capacity
optimization rationalization across various plants
by
• Demand for NTCF expected to be
stable
• Growth in BF and PIY as expansions
get completed next year
• Stable
business
forward, reasonable order book for ensuing quarters
going
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About Us
in
the manufacturing of
Established in 1970, SRF Limited with an annual turnover of ₹14,592 crore (US$ 1.8 billion) is a chemical based multi-business entity engaged industrial and specialty intermediates. The company’s diversified business portfolio covers Fluorochemicals, Specialty Chemicals, Packaging Films, Technical Textiles and Coated and Laminated Fabrics. Anchored by a strong workforce of close to 8,000 employees from different nationalities working across twelve manufacturing plants in India and one each in Thailand, South Africa and Hungary, the company exports to more than 90+ countries. Equipped with State-of-the-Art R&D facilities, SRF has filed 408 patents for R&D and technology so far, of which 139 have been granted. A winner of the prestigious Deming Prize for two of its businesses, namely Tyre Cord and Chemicals, SRF continues to redefine its work and corporate culture with TQM as its management way.
For further information please contact
Anoop Poojari
CDR India
Email: anoop@cdr-india.com
Tel: +91 98330 90434
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THANK YOU
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