For years, chemicals have been SRF’s main earnings engine. In the September quarter, packaging films grew faster and became the larger business by revenue.
Historically, SRF has been known mainly as a specialty chemicals company. Additionally, SRF manufactures refrigerant gases and fluorochemicals, and supplies intermediates to global agrochemical and pharmaceutical companies. Those businesses earn high margins and have driven most of its profit growth over the past decade.
The September quarter was different. Consolidated revenue rose 35% to ₹4,904 crore. Revenue from Performance Films and Foil, which makes plastic films for packaging and other uses, jumped 51% to ₹2,122 crore. That made films slightly larger than the chemicals business, whose revenue grew 25% to ₹2,079 crore.
Strong revenue, weaker profit
The numbers show strong sales growth with less profit growth. Chemicals segment revenue rose 25%, but its operating profit grew only 10% to ₹528 crore. Margins in chemicals narrowed, reflecting higher raw material and energy costs and continued price competition, particularly from Chinese producers selling into global markets.
That matters because chemicals has historically delivered SRF’s best returns. When the lower-margin films business grows quickly and the higher-margin chemicals business grows slowly, total profit grows more slowly than revenue. Consolidated net profit rose 31% to ₹509 crore, up from ₹388 crore a year earlier, but below the analyst consensus of about ₹598 crore. Operating EBIT rose 26% to ₹816 crore. Compared with the April–June quarter, when revenue was ₹5,033 crore, both revenue and profit were lower, with profit down about a third. For the first half, revenue rose 33% to ₹9,937 crore.
The films business is benefiting from steady demand for flexible packaging, driven by packaged food, consumer goods and e-commerce. These are competitive products with thinner margins than specialty chemicals, but they are useful for volume and capacity utilisation.
A move into battery materials
The board’s ₹600 crore approval for a battery-grade aluminium foil plant is the decision with the longest-term impact.
Aluminium foil is a key part of every lithium-ion battery cell, where it serves as the current collector for the cathode. Battery-grade foil has to meet much tighter standards than packaging foil for thickness, purity and consistency, and it sells at higher prices. India is building large battery manufacturing capacity for electric vehicles and grid storage, backed by production-linked incentive schemes. Most of the materials those plants need are still imported, mostly from China.
SRF already makes aluminium foil for packaging and pharmaceutical uses, so this is an extension of something it knows. Moving into battery-grade foil uses that experience in a market where technical quality determines who gets the business. If it succeeds, SRF becomes a domestic supplier to Indian battery makers just as policy encourages them to reduce imports.
The decision fits a wider shift in the economy. Adani Green is adding grid battery storage at Khavda. Battery cell plants are under construction. EV makers want local suppliers. Each of these depends on materials India does not yet produce at scale. Several Indian companies are now trying to fill that gap, and SRF’s move puts it among them.
The ₹600 crore plant will take time to produce revenue and longer to contribute to profit. SRF’s results this quarter showed its chemicals business under margin pressure. The battery foil decision shows where the company may see its next phase of growth coming from.
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