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SRF Ltd

| Quarterly Financial Results Q3 FY 2025–26

BULLISH SENTIMENT

Report Source

⬤20th Jan 26

Summary : SRF Limited reported strong Q3 and 9M FY26 financial results with significant revenue and profit growth, declared an interim dividend, and received a favorable tax ruling, despite ongoing regulatory uncertainties.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Cost of materials consumed
  2. Purchases of stock-in-trade
  3. Changes in inventories
  4. Employee benefits expense
  5. Finance cost
  6. Depreciation and amortisation expense
  7. Power and fuel
  8. Exchange currency fluctuation (gain)/loss
  9. Other expenses
  10. Exceptional item (one-time impact of New Labour Codes).
  11. Bad debts to accounts receivable ratio for 9M FY26: 0.02% (Consolidated) and 0.01% (Standalone).
  12. Standalone Revenue from operations for Q3 FY26: Rs. 2951.68 crores (vs Rs. 2761.64 crores in Q3 FY25).
  13. Consolidated Revenue from operations for Q3 FY26: Rs. 3712.53 crores (vs Rs. 3491.31 crores in Q3 FY25).
  14. Standalone Revenue from operations for 9M FY26: Rs. 8844.81 crores (vs Rs. 8201.47 crores in 9M FY25).
  15. Consolidated Revenue from operations for 9M FY26: Rs. 11171.34 crores (vs Rs. 10379.73 crores in 9M FY25).
  16. Segment Revenue breakdown: Technical Textiles, Chemicals, Performance Films, and Others.
  17. Standalone Net Worth as of Dec 31, 2025: Rs. 12474.04 crores (vs Rs. 11088.75 crores in Dec 31, 2024).
  18. Consolidated Net Worth as of Dec 31, 2025: Rs. 13741.86 crores (vs Rs. 12117.04 crores in Dec 31, 2024).
  19. Segment Assets and Liabilities are provided for Technical Textiles, Chemicals, Performance Films, and Others.
  20. Both standalone and consolidated unaudited financial results are presented.
  21. Consolidated results include SRF Limited and its nine subsidiaries.
  22. Auditors' review for some subsidiaries was performed by other auditors.

Corporate Overview

  1. India
  2. Thailand
  3. South Africa
  4. Europe
  5. Middle East
  6. Finalization of Central/State Rules for New Labour Codes
  7. Re-assessment of uncertain tax positions regarding Carbon Emission Reduction Certificates (CERs)
  8. Regulatory changes (New Labour Codes)
  9. Taxation policies (CERs)
  10. Technical Textiles Business (TTB)
  11. Chemicals Business (CB)
  12. Performance Films and Foil business (PFB)
  13. Others

Risk Factors

  1. Finalization of New Labour Codes.
  2. Uncertain tax positions on CERs.
  3. Auditor's scope limitation for subsidiaries.

Key Drivers

  1. Strong revenue and profit growth.
  2. Favorable tax ruling received.
  3. Interim dividend declared.
  4. ESOPs granted to employees.

Auditor’s Report

  1. Expressed a limited review conclusion, not an audit opinion.
  2. Conclusion is not modified regarding the financial statements.
  3. Auditors did not review interim financial information of certain subsidiaries; their conclusion relies on reports by other auditors and management's conversion adjustments.

Board Commentary

  1. Approved second interim dividend of Rs. 5.00 per fully paid up equity share for 2025-26, aggregating Rs. 148.21 Crores.
  2. Uncertainty regarding final rules for New Labour Codes
  3. Ongoing uncertainty on taxability of Carbon Emission Reduction Certificates (CERs)
  4. One-time impact of New Labour Codes resulted in Rs. 72.95 crores increase in employee benefit provision.
  5. Received favourable ITAT order for assessment years 2011-12 and 2013-14, leading to a write-back of Rs. 99.12 crores in tax provisions related to Carbon Emission Reduction Certificates (CERs).
  6. Approved grant of 232,810 Employee Stock Options (ESOPs) to eligible employees under SRF Long Term Share Based Incentive Plan (SRF LTIP) 2018.

Corporate Governance

  1. Audit Committee and Board of Directors reviewed and approved the results.
  2. Nomination and Remuneration Committee approved ESOP grants.

Management Discussion & Analysis

Future Strategy

  1. Monitoring regulatory developments for New Labour Codes
  2. Re-assessing uncertain tax positions on CERs

Operational Focus Areas

  1. Compliance with new labour codes
  2. Managing tax uncertainties

Performance Drivers

  1. Increased revenue from operations
  2. Higher net profit after tax
  3. Improved operating and net profit margins
  4. Growth across all business segments

Risk Control Measures

  1. Company continues to monitor finalisation of rules
  2. Company will re-assess uncertain tax positions

Critical Risks

  1. Uncertainty regarding final rules for New Labour Codes
  2. Ongoing uncertainty on taxability of Carbon Emission Reduction Certificates (CERs)