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,
30.10.2023
Presentation- Earnings Call (Un-Audited Financial Results for the quarter and half year ended 30.09.2023)
In continuation of our letter dated 25th October, 2023 informing about hosting of earning call to discuss Un- Audited financial results for quarter and half year ended 30th September, 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 Block-C Sector 45 Gurugram 122 003 Haryana India Tel: +91-124—4354400 Fax: +91-124—4354500 E-mail: info@srf.com Website: www.srf.com Regd. Office: Unit No. 236 & 237, 2nd Floor DLF Galleria, Mayur Place Noida Link Road Mayur Vihar Phase 1 Extension Delhi 110091
SRF - General [Restricted use] - This mail, document can be used by recipients for its intended purpose only.
Corporate identity No. L181010L1970PLC005197
SRF Limited
Q2 & H1 FY24 Results Presentation
30th October, 2023
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Disclaimer
changes,
Some statements in this document may be forward-looking. Such statements are subject to certain risks and uncertainties like regulatory 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
Q2 & H1 FY24 RESULTS OVERVIEW
Q2 & H1 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
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 / Specialized Applications
• Contract Development and Manufacturing
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
• Strong tech capability – pilot to creating value commercial; through operational excellence • Driving customer engagement and satisfaction through world class R&D, EHS and quality management
• Handling complex reactions - Ethylation, Nitration, Grignard, Isomerization, Organocatalysis
Halogenation, Hydrogenation, Diazotization, Cyanation, Amination, and Decarboxylation
• 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
• 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
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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 • Strong decarbonisation impetus – use green/renewable energy
Build a Company known and respected for its R&D capabilities
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02. Q2 & H1 FY24 Results Overview
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Abridged Results Overview
Consolidated figures
Particulars (Rs. Crore)
Q2 FY24 Q2 FY23 % Y-o-Y H1 FY24
H1 FY23 % Y-o-Y
Gross Operating Revenue
3,177.4
3,727.8
-14.8%
6,515.7
7,622.5
-14.5%
EBITDA
674.4
837.9
-19.5%
1,406.2
1,867.6
-24.7%
EBITDA Margin (%)
21.2%
22.5%
21.6%
24.5%
Depreciation
Interest
ECF (Gain) / Loss
Profit Before Tax
Profit After Tax
161.2
139.3
15.7%
78.3%
44.5
36.1
317.8
144.9
42.8
270.0
17.7%
88.3%
77.0
61.0
618.1
-32.9%
900.6
1,459.7
-38.3%
481.0
-37.5%
660.1
1,089.0
-39.4%
79.3
19.1
414.8
300.8
Profit After Tax Margin (%)
9.5%
12.9%
Basic and Diluted EPS (Rs.)
10.15
16.23
10.1%
14.3%
22.27
36.74
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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
Q2 FY24
Total – 3,180.8
126.9
4.0%
506.1
15.9%
44.8%
Q2 FY23
H1 FY24
H1 FY23
Total – 3,727.8
Total – 6,519.5
Total – 7,622.8
Revenue (Rs. Crore)
466.2
100.4
2.7%
12.5%
245.6
3.8%
970.8
14.9%
1,037.2
206.0
2.7%
13.6%
49.1%
47.3%
46.6%
35.3%
35.7%
34.0%
37.1%
1,121.5
1,426.3
1,331.0
1,830.2
2,216.3
3,086.8
2,827.0
3,552.6
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CB
PFB
TTB
Others
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
Results Overview - EBIT Share
Q2 FY24
Total – 533.1
33.1
74.9
6.2%
14.1%
14.5%
77.3
65.2%
347.8
Q2 FY23
Total – 689.2
H1 FY24
Total – 1,128.3
EBIT (Rs. Crore)
H1 FY23
Total – 1,627.6
62.9
7.6
1.1%
101.4
9.1%
14.7%
56.2
5.0%
135.6
12.0%
128.6
11.4%
179.1
14.4
0.9%
396.6
11.0%
24.4%
75.1%
517.3
71.6%
807.8
63.7%
1,037.5
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CB
PFB
TTB
Others
CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others
03. Q2 & H1 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
Q2 FY24 Q2 FY23
% Y-o-Y
H1 FY24
H1 FY23
% Y-o-Y
Segment Revenues
1,426.3
1,830.2
-22.1%
3,086.8
3,552.6
-13.1%
% Contribution to Revenues
44.8%
49.1%
47.3%
46.6%
EBIT
347.8
517.3
-32.8%
807.8
1,037.5
-22.1%
% EBIT Margins
24.4%
28.3%
26.2%
29.2%
% Contribution to EBIT
65.2%
75.1%
71.6%
63.7%
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Chemicals Business
Specialty Chemicals Business - Key Highlights
•
Specialty Chemicals Business performance impacted during the quarter due to inventory destocking caused by: o Supply chain challenges easing out post COVID o Global interest rate cycles at its peak leading to working
capital pressures at customers’ end
• Maintained strong customer engagement for complex downstream
products and introduced new products o Launched 6 new products in H1 : 4 in Agro and 2 in Pharma o Robust pipeline for new and complex products in place
•
•
The Board has approved a project for setting up a new facility to produce an agrochemical intermediate at Dahej at a projected cost of Rs. 235 crore to cater to customers’ needs
Projects close to Rs. 1,100 crore to be commissioned in H2 FY24; to contribute to healthy growth in near future
Market Trends
• Most major
agrochemical
companies cautiously optimistic about the demand outlook over the medium-to-long term
•
•
Inventory rationalization currently seems transitory
India's global significance as an alternate manufacturing base for specialty chemicals remains intact
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Chemicals Business
Chemicals Technology Group • Chemicals Technology Group (CTG) is actively engaged in the development of new process technologies
• Key focus on high end molecules and AIs
• Strong
internal
competencies
and
capabilities
• Equipped with state-of-the-art R&D ingenious team of
facilities and an scientists and engineers
• 2 R&D centres
in
India – Bhiwadi,
Rajasthan and Gurugram, Haryana
• 10 new process patents granted
in
H1FY24
142
Global Patents granted
421
Patents applied
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Chemicals Business
Fluorochemicals Business - Key Highlights
• Business performance was subdued due to:
o Chinese dumping lead to low demand and weak prices in key
refrigerants o Sluggish growth
in pharmaceuticals and agrochemical industries adversely impacted demand for some industrial chemicals
• Despite weak domestic market, SRF’s market share in HFCs was
higher
Market Trends
•
•
Price of major ref gases seems to be better, both domestically and internationally
Key raw material prices anticipated to remain stable
• HFC quotas for CY 2024 from US markets and
sales plan alignment in place
• Domestic passenger vehicle market showing
• Business to prioritize commissioning and ramp-up of ongoing
growth, positive for the business
projects in FY24 o PTFE plant commissioned by our internal team, showcasing
strong tech capabilities
o PX-1 and PX-2 facing slight delay; to be capitalized in H2 FY24
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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
Q2 FY24 Q2 FY23
% Y-o-Y
H1 FY24
H1 FY23
% Y-o-Y
Segment Revenues
1,121.5
1,331.0
-15.7%
2,216.3
2,827.0
-21.6%
% Contribution to Revenues
35.3%
35.7%
34.0%
37.1%
EBIT
77.3
101.4
-23.8%
128.6
396.6
-67.6%
% EBIT Margins
6.9%
7.6%
5.8%
14.0%
% Contribution to EBIT
14.5%
14.7%
11.4%
24.4%
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Packaging Films Business
Key Highlights
• Business continued facing supply overhang and pressure on
margins with commissioning of several new lines
• Enhanced share of revenue from VAPs both in BOPET and BOPP
•
Focus on growing profitability efficiencies, cost optimisation and by increasing contractual sales
through higher operational
• The Board has approved projects for setting up manufacturing facility for Capacitor Grade BOPP Film at a projected cost of Rs. 275 crore
• Commissioning of aluminum foil plant started – commercial
production expected soon
Market Trends
• Demand-supply
imbalance and margin in medium term,
pressure to continue especially in BOPET
•
Capacity utilisation expected to remain muted across industry
• BOPP expected to perform relatively better
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Packaging Films Business
Capacitor Grade BOPP Film Capex
Rationale
• Government focus on indigenous electronics manufacturing, green energy, EVs and energy storage system
Applications
• Use
in
low temperature and
frequency applications:
• Opportunity China+1
to
leverage on
o Consumer Electronics
o Energy storage systems
Capex details
• Expected cost ~ Rs. 275 crore,
state of the art machine
• Expected completion within
31 months
• Higher grade technical films as adjacencies to existing business
• High demand growth
favorable dynamics
demand
likely; supply
o EV
chargers and other
applications
• Nominal capacity 4500 MTPA
• To be setup at Indore
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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
Q2 FY24 Q2 FY23
% Y-o-Y
H1 FY24
H1 FY23
% Y-o-Y
Segment Revenues
506.1
466.2
8.6%
970.8
1037.2
-6.4%
% Contribution to Revenues
15.9%
12.5%
14.9%
13.6%
EBIT
74.9
62.9
19.1%
135.6
179.1
-24.3%
% EBIT Margins
14.8%
13.5%
14.0%
17.3%
% Contribution to EBIT
14.1%
9.1%
12.0%
11.0%
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Technical Textiles Business
Key Highlights
• Business delivered stable performance, with underlying
industries showcasing healthy demand trends
•
•
•
Performance of Belting fabric and Polyester Industrial Yarn was better, contributed by enhanced focus on high-end VAPs
Phased capacity enhancement of TCF value chain project completed during Q2 FY24
Expansion project in the Belting Fabrics and Polyester Industrial Yarn segment progressing as per schedule
Market Trends
• Higher imports from China witnessed
• Growth across all vehicle segments to support demand for Nylon Tyre Cord Fabric
•
in Belting Improved demand expected Fabrics and Polyester Industrial Yarn segments on the back of Government’s focus on infrastructure development
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O t h e r s
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Others - Results Update
Consolidated figures
PARTICULARS
Q2 FY24
Q2 FY23
% Y-o-Y
H1 FY24
H1 FY23
% Y-o-Y
Segment Revenues
126.9
100.4
26.4%
245.6
206.0
19.2%
% Contribution to Revenues
4.0%
2.7%
3.8%
2.7%
EBIT
33.1
7.6
335.9%
56.2
14.4
292.0%
% EBIT Margins
26.1%
7.6%
22.9%
7.0%
% Contribution to EBIT
6.2%
1.1%
5.0%
0.9%
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Others - Key Highlights
Coated Fabrics • Achieved record quarterly sales and EBITDA; maintained
domestic market leadership
• Demand growing in storage liners, tarps etc. SRF captured large part of this demand with its product quality and efficient TATs.
• Demand expected to remain strong in the near-future
Laminated Fabrics •
SRF achieved highest ever sales in H1:
o Plant continues to operate at full capacity o Maintained market price leadership
• Oversupply situation continues – new capacity additions
expected in H2
• Demand expected to remain stable
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SRF’s Community Engagement
•
•
•
SRF Foundation honored with the Shiksha Bhushan Award at the 27th Bhamashah Samman Program by the Government of Rajasthan
SRF Foundation won the CSR Times Award 2023 (Gold) for its Rural Education Program
Eighteen trainees of the Basic Electrician Training Program conducted by SRF Foundation in the vicinity of our Packaging Films Business facility at Dhar (Madhya Pradesh, India) were successfully placed at Eicher, earning a monthly honorarium of INR 12,000
• We have successfully concluded the setting up of new labs at twenty-four institutes (Polytechnics and ITIs) and have been conducting online training programs on AI, ChatGPT, career counselling, among others. Over 4,500 students have already enrolled for these training programs
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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
• Customer traction still strong
• Global customers’ geo-political de-risking theme continues
• Focus on growth of pharma vertical
• Commission new plants and their ramp up
• Fundamentally, business in good shape. Cycles are a part and parcel of business
Fluorochemicals
• Domestic demand should witness positive traction in Q3 and US demand from
Q4 FY24
• Some signs of pricing positive in both ref gas and Industrial Chemicals being
witnessed
• Focus on PTFE sales and product approvals at the earliest
• 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.
• Continue
focus on value-added
products both in BOPP and BOPET
• Aluminium foil project on the verge of commissioning, product approvals should take 3-6 months
• 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
• BF and PIY to be future growth
drivers
• Stable business going
forward, reasonable order book for ensuing quarters
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About Us
Established in 1970, SRF Limited is a chemical based multi-business entity engaged in the manufacturing of 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 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 421 patents for R&D and technology so far, of which 142 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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