Synopsis: Shares of this specialty chemicals company were under pressure after management indicated softer near-term quarters despite maintaining a positive long-term outlook, prompting investors to reassess the pace of earnings recovery.
The shares of this large cap company majorly engaged in manufacturing and selling technical textiles, chemicals, packaging films, aluminum foils, and other polymers, plunged upto 9 percent after the management guided about upcoming quarters
With the market capitalization of Rs. 78,038 Crores, the shares of SRF Ltd reached an intraday low of Rs. 2615 per share falling nearly 9 percent from its previous day close of Rs. 2867 per share and is trading at a P/E of 34.8 whereas industry P/E stands at 21.4
Q1 FY27 Result:
YoY analysis: Revenue from operations has increased from Rs. 3819 Crores in Q1 FY26 to Rs. 5033 Crores, in Q1 FY27, up 31 percent. Operating profit has increased from Rs. 830 Crores to Rs. 1,237 Crores, up 49 percent and net profit has increased from Rs. 432 Crores to Rs. 759 Crores, up 75 percent.
QoQ analysis: Revenue from operations has increased from Rs. 4615 Crores in Q4 FY26 to Rs. 5033 Crores in Q1 FY27, up 9 percent. Operating profit has increased from Rs. 1026 Crores to Rs. 1237 Crores, up 20 percent and net profit has increased from Rs. 582 Crores to Rs. 759 Crores, up 30 percent.
Why the stock fell nearly 9 percent:
The shares of SRF Ltd came under pressure despite reporting a strong first quarter as investors focused more on the company’s forward guidance than its quarterly performance. While management indicated that prices and volumes are showing early signs of improvement and expects Refrigerant Gas (RG) prices to remain stable or improve, it also cautioned that Q2 and Q3 are likely to be softer than Q1, reflecting the seasonal nature of the business. This tempered expectations for near-term earnings growth.
Although the company reiterated its confidence in achieving good volume and price growth during FY27 and highlighted that it operated at 100 percent capacity in Q1, the market appeared unconvinced about the pace of recovery.
Investors also viewed the company’s long-term target of increasing the pharma business contribution to 20–30 percent of revenue by 2030 as a gradual growth driver rather than an immediate earnings catalyst, leading to profit booking after the recent run-up in the stock.
About the company:
SRF Ltd is a diversified chemicals company engaged in the manufacturing of specialty chemicals, fluorochemicals, packaging films, and technical textiles. The company serves a wide range of industries, including pharmaceuticals, agrochemicals, automotive, refrigeration, food packaging, and industrial applications.
Its Specialty Chemicals business develops custom-made products for global customers, while the Fluorochemicals segment manufactures refrigerants and advanced fluoropolymers.
SRF also has a strong presence in Performance Films, catering to flexible packaging and industrial applications, and Technical Textiles, supplying products such as tyre cord fabrics, belting fabrics, and coated fabrics.
Backed by continuous investments in research and development, capacity expansion, and value-added products, the company has established a diversified business model with a growing presence in both domestic and international markets.
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