#ROE

In FY25, ROE was reported at 11.2%. During the year, net profit increased 9% YoY and net worth increased by 29% YoY.

#COMPANY #POTENTIAL

• India is the 2nd largest producer of cement, with an installed capacity of ~686 million ton (MT). Driven by sustained demand from the housing and infrastructure sectors, cement volumes reached 440-445 million MT in FY25. This growth is projected to continue, reaching 475-480 million MT in FY26. • India’s per capita cement consumption is 250 kg, far below China’s 1,600 kg, offering substantial growth potential. Cement demand in India is expected to grow 1.2x to 1.5x of GDP. In FY26, India’s GDP is envisaged to grow at ~6.5%. • The Indian cement industry is set for significant growth, driven by infrastructure projects and urban development. Installed capacity is expected to reach 850 million tonne per annum (MTPA) by 2030 and 1,350 MTPA by 2050. In FY26, the industry is expected to add ~43-45 MTPA capacity. cement demand. cement demand. • Indian cement sector is fragmented and regional industry - Adani Cement is a pan India player. Their current market share is ~15%, with a target of reaching 20% by FY28. • The desire for homeownership, particularly in the post-pandemic era, is driving the growth of India’s housing sector across both urban and rural areas. As the largest consumer of cement, the housing sector currently accounts for around 65% of the country’s • The Union Budget FY26 has allocated ₹11.2 lakh cr for CAPEX, a 10% increase from the revised estimate of ₹10.2 lakh cr FY25. The budget prioritizes infrastructure investment across key sectors. The infrastructure sector constitutes approximately 24% of total • The company management envisages, industry supply to grow by 6% CAGR and demand to grow by ~7%-7.5% CAGR till FY30.

#COMPANY #OUTLOOK

• They have ordered 11 General Purpose Wagon Inward System (GPWIS) rakes, of which 11 have been delivered and running in approved circuit. These rakes will enable cost-efficient clinker movement from mother plants to the clinker grinding units. In addition to these, they have also ordered 26 Bulk Cement Freight Consortium (BCFC) rakes for safe and cost-efficient transportation of fly ash from thermal power plants to their facilities. Of these 26 BCFC rakes, 8 rakes have been delivered in FY25. • The Company aims to optimize lead distances by ~100 kms going forward, thereby improving overall logistics efficiency. In addition, it is targeting a modal shift in logistics, with 10% of cement transportation to be undertaken via sea routes by FY28. Marine to transport cement and clinker. logistics presents significant cost advantages, with estimated savings of ~30% compared to rail and ~60% compared to road transport on a per tonne per km basis. They currently have a fleet size of 14 dedicated sea vessels which enables them to dispatch 3 MT of cement annually, while operating across 11 strategically located terminals. The Company plans to add 10 more sea vessels • The management aims 60% of their future cement capacity and 83% of clinker operations to be powered by green energy. Currently, 218 MW of Waste Heat Recovery Systems (WHRS), 200 MW of solar capacity, and 99 MW of wind energy from their Khavda facility is operational. Out of the remaining 707 MW of solar and wind power, 70% projects are slated for completion by June 2025, and the balance by December 2026. These investments are expected to reduce power costs by approximately ₹90 per tonne by FY28. • Consolidated capacity stood at 89 MTPA as on 31st March 2025 and ~100 MPTA as on April 2024 (acquisition of Orient Cement in (8.5 MTPA), the 2.4 MTPA expansion at Farakka, and a 0.5 MTPA through de-bottlenecking). The company is actively pursuing a major capacity expansion initiative of 19 MTPA across various regions, setting a clear roadmap to achieve 118 MTPA by FY26. Growth in the current fiscal would be largely driven by organic expansions.

Ambuja Cements 450-525
Expected level 670
Support 404

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SRF company details report

Incorporated in 1970, SRF Limited started operations with a nylon tyre cord plant in Manali, Tamilnadu. It is a chemical based multibusiness entity engaged in the manufacturing of industrial and specialty intermediates. SRF manufactures intermediate products which are largely supplied to other industries for manufacturing of the final product. The company has classified its main businesses as Technical Textiles Business (TTB), Chemicals Business (CB), Packaging Films Business (PFB) and other business. Under the Technical Textiles Business, the company manufactures tyre cord fabrics, belting fabrics, and polyester industrial yarn. Its plants are in Manali, Gummidipoondi and Viralimalai in Tamil Nadu and Malanpur in Madhya Pradesh. Under the Chemicals Business, the company has two business division, i.e., Specialty chemicals business and Fluorochemicals business. In specialty Chemicals business, it develop and produce advanced intermediates for Agrochemical and Pharmaceutical applications. Its plants are in Dahej and Bhiwadi located in Gujarat and Rajasthan, respectively. Fluorochemicals business encompasses the manufacture and sale of refrigerants, pharma propellants, and industrial chemicals. Under the Packaging Films Business segment, it manufactures biaxally oriented polypropylene (BOPP) and biaxally oriented polypropylene terephthalate (BOPET) used in flexible package covers and labels. The company has two plants in Indore, Madhya Pradesh and one plant in Kashipur, Uttarakhand. In addition, there are three overseas plants in Thailand, South Africa and Hungary. Other business includes coated fabrics and laminated fabrics.

The company is a market leader in most of its business segments in India and also commands a significant global presence in some of its businesses. It has 11 manufacturing plants in India and one each in Thailand, South Africa and Hungary. The company exports to 90+ countries. The company’s in-house research and development (R&D) helps development of cost-effective routes for both new and existing products. The Chemicals Technology Group (CTG) at SRF is actively engaged in the development of new products and process technologies for its fluorochemicals and specialty chemicals businesses. The group’s key focus is the development of intermediates for new Active Ingredients (AI) in pharmaceuticals and agrochemical industries as well as new generation refrigerants. As on 31st March 2024, SRF has filed 443 patents for R&D and technology so far, of which 149 patents have been granted globally. The company is a business to business player and, as such, the customers are largely manufacturing companies. The product is manufactured as per the agreed parameters and specifications. The company has 8 subsidiaries, i.e., SRF Global BV, SRF Flexipak (South Africa) (Pty) Limited, SRF Industries (Thailand) Limited, SRF Industex Belting (Pty) Limited, SRF Europe Kft, SRF Holiday Home Limited, SRF Employees Welfare Trust (controlled trust), and SRF Altech Limited.

Segment

EBITDA

#SALES #GROWTH

In FY25, the sales increased by 12% YoY to ₹14,693 cr led by ~24% growth in performance films & foil business, ~6% growth in chemical business and ~7% growth in technical textile business. In chemical business, the company reported growth mainly led by increased revenue in the second half, with a particularly strong performance in Q4 FY25. During H1 FY25, SRF witnessed a decline YoY mainly led by speciality chemicals. It faced headwinds due to agrochemicals segment which was impacted due to inventory rationalization by certain key customers. In Q4 FY25, the specialty chemicals reported a strong performance, driven by positive momentum in the recently launched products and a pick-up in demand for certain key agrochemical intermediates. The fluorochemicals reported a robust performance on account of the strong domestic demand for refrigerants, particularly for room air conditioners, which resulted in a high domestic sales of refrigerant gases

#EBITDA #GROWTH

In FY25, the EBITDA grew by 5.2% YoY to ₹2,718 cr. Segment wise, the performance films & foil business and chemicals business EBIT reported growth while the technical textile EBIT witnessed a decline YoY due to belting fabrics (BF) as it was affected by the influx of low-cost imports from China. In performance films & foil business, the company witnessed growth in both BOPET (biaxially oriented polyethylene terephthalate) and BOPP (Biaxially oriented polypropylene) led by increased capacity utilization driven by rising demand.

#PAT #GROWTH

PAT GROWTH Over the years, the company’s PAT increased on account of increase in scales of operation, capacity addition, new products launch and client additions. In FY25, the PAT declined by 6.4% YoY to ₹1,251 cr. The PAT declined because of higher tax expenses. In FY25, the effective tax rate stood at 26.6% (v/s 21.1% in FY24).

#EBITDA #MARGIN

EBITDA MARGIN In FY25, the EBITDA margin contracted by 117 bps YoY to 18.5%. This was mainly led by contraction in chemical business and technical textile business margin. The chemical business EBIT margin contracted by 96 bps YoY to 24.9% and technical textile business EBIT margin contracted by 272 bps YoY to 11.7%. The performance films & foil business EBIT margin improved to 6.6% from 4.6% in FY24 led by improvement in both BOPET and BOPP due to increased capacity utilization driven by rising demand. Last year, the margin was highly impacted due to substantial capacity addition in India & overseas in both BOPET & BOPP film segments and the global economic slowdown. In Q4 FY25, the chemical business EBIT margin improved to 31.8% from 27.4% in Q4 FY24, led by margin expansion in the fluorochemicals and speciality chemical business.

#PAT #MARGIN

In FY25, the PAT margin contracted by 165 bps YoY to 8.5%. The energy costs in Europe witnessed some softness. The benefit of the reduction in energy costs would likely to reflect in the coming quarters. The PAT margin over the years expanded on account of expansion in operating profit margin. In 9M FY25, the PAT margin contracted by 256 bps YoY to 7%.

#ROCE

In FY25, the ROCE declined to ~12.3% because of increase in capital employed. Capital employed increased because of high increase in retained earnings. In FY25, SRF invested ~₹700 cr towards various debottlenecking and expansions projects in chemicals business. Capacity addition, new products launch supported by strong R&D capability in chemicals segment, growing contribution of value added products in the performance films & foil business and market leadership in most of its products has helped in improving operating profit and return on capital employed of the company.

#ROE

In FY25, the return on equity declined to 10.4%. This was led by decline in net profit. Over the years, the return on equity increased supported by continued capital expenditure for new products & capacity expansion in the growing & high margin products and geographical expansion. The company new product portfolio is being enhanced continuously, which also helped to expand and strengthen its customer base further for the chemical business and increase the overall profitability of the business. No single customer contributed 10% or more to the group’s sales.

#COMPANY #POTENTIAL

Chemicals: • The fluorochemicals (chemicals containing fluorine) have vast applications like agrochemicals, pharmaceuticals, refrigerants, automobiles, electrical and electronics and many others. While some applications like old generation refrigerants are getting phased out, new applications in semiconductors, electric vehicles are emerging. • Applications in agrichemicals and pharma products are growing faster than other segments given that 30% of drugs and 50% of The grocrop protection products under development contain fluorine, as per Solvay. • Growth in the fluorine-based intermediates segment will be the highest with a CAGR of 16.1%, with India moving towards inhouse manufacturing of many actives and intermediates which were other wise imported from China. Packaging films: convenient and light packaging. • BOPP and BOPET films demand stood at 6.54 million tonnes in FY20 and is anticipated to reach 11.27 million tonnes by FY30, growing at a CAGR of 5.6% until FY30. • BOPP and BOPET films market is projected to grow at a steady CAGR due to the rise in the packaging industry. The high demand to replace the traditional packaging types including metal cans and cartons coupled with the shift in consumer preference for • BOPP and BOPET films are the polyester films that are majorly used for packaging, labeling, and lamination. These films are majorly used in electrical and electronics, pharmaceutical, medical and personal care.

#COMPANY #OUTLOOK

Chemical business:

• The management expects 20% growth in the chemical business, going forward. It expects ~₹11,000-₹12,000 cr of revenue by FY28 in the chemical business. The split of specialty chemicals business and fluorochemicals business would remain in the similar range. • It expects chemical business EBIT margin to be in the range of ~25%-26%. • The company expect to see full benefit of the extended capacity by FY27 in speciality chemical business. • The company anticipates good growth in the fluoropolymers business in FY26. It expects India and Middel East to drive growth for the refrigerants business. healthy order book in the new locations as well. • In FY26, the management expects the hydrofluorocarbons (HFCs) capacity utilization to improve to ~85%-90% from the current levels of ~70%. • SRF continued to grow its global market share of R134a pharma grade gas marketed under the Dymel brand with presence in India, Bangladesh, Argentina, and Thailand. It is further expanding to new geographies such as Greece and Taiwan and have a • The company has also started working on the next range of industrial chemicals. This will open up new areas of growth beyond the chloromethane chain.

Performance Films & Foil business:

• In Q4 FY25, the margins improved for both BOPET (biaxially oriented polyethylene terephthalate) and BOPP (Biaxially oriented polypropylene) due to increased capacity utilization driven by rising demand. • The company is focusing on profitability, by commercializing new value-added products (VAPs) and boosting sales of high-impact VAPs. • Currently, the capacity expansion of 50,000-55,000 MTPA (metric tonnes per annum) is progressing as per the plan. • The company’s overseas operations improved during the year, led by better performance in the Hungary unit. Technical textile business:• The management expects the newly commissioned aluminium foil facility to contribute positively to the overall performance. It expects demand from electric vehicle (EV) and air conditioner (AC) frames application segment. •

Technical textile business:

In Q4 FY25, the demand for polyester tyre cord fabric and polyester industrial yarn (PIY) remained robust, while volumes of nylon tyre cord fabric was flat. The performance of belting fabrics (BF) was affected by the influx of low-cost imports from China, which had an impact on the overall performance of the business. • During the quarter, the company successfully commissioned the full capacity expansion for belting fabrics. • The management expects the demand for belting fabrics to grow in the near future on account of increased government focus on infrastructure development. • The polyester Industrial Yarn demand is expected to increase supported by geo-textiles and seat belts

SRF 2450-2650
Expected level 3100
Support 2300