SRF Share Price Surge 9% on May 6 – Here is Why

The shares of SRF Ltd witnessed an increase of almost 9% in their prices on May 6, 2025, which is Wednesday. The reason behind this rise is that the management of SRF Ltd provided encouraging comments on the earnings of the company, indicating high growth prospects in the chemicals segment. The stock price was around ₹2,723.7, and it had increased by 12% in the last month.

Management guides 15-20% growth in chemicals business

The top management of SRF was very positive about its chemicals division, predicting growth in the range of 15% to 20% during the new fiscal year. This was due to the robust future of the chemicals division owing to rising global demand and its investment in advanced product lines.

Although the company faced difficulties selling products in the West Asia region owing to the geopolitical crisis currently taking place there, SRF stated that it had managed to diversify into other markets. While West Asia still remains a critical market for SRF, its geographic diversification is enabling it to overcome this hurdle.

Additionally, SRF expects significant growth from its investment in fourth-generation refrigerants.

Q4FY26 performance beats expectations

The company has delivered impressive figures for the March quarter, exceeding the street estimates on several fronts. SRF’s revenue for Q4FY26 recorded a rise of 7% year-on-year to ₹4,615 crore, considerably better than the poll prediction of ₹4,112 crore.

Its net profit for the quarter climbed 10.6% year-on-year to ₹582 crore, also ahead of the poll estimate of ₹452 crore. The EBITDA number rose 7.1% year-on-year to ₹1,026 crore from ₹957 crore in the previous year's corresponding quarter, surpassing the poll estimate of ₹930 crore.

The EBITDA margin came in flat at 22.2%, lower than the poll estimate of 22.6%.

Segment-wise performance shows broad-based strength

All segments of the business showed very good results. Technical Textiles showed an impressive turnaround, with the EBIT number increasing by 63% year-over-year and 45% quarter-over-quarter to ₹65 crore.

Chemicals business, which continues to be the backbone, saw a 5% year-on-year and 58% quarter-on-quarter increase in EBIT to ₹782 crore.

Finally, the Packaging Films business saw excellent momentum, with the EBIT number surging by 47% year-on-year and 62% quarter-on-quarter to ₹154 crore.

Aggressive capex plans to drive future growth

When it comes to investments, there have been significant enhancements on the part of SRF regarding capital expenditure plans. The company has approved an investment worth ₹2,300 crore, whereas previously, ₹1,100 crore had been announced back in October 2024.

The investments shall be spent on developing a 20 ktpa HFO unit, a new 30 ktpa HF unit, and additional derivatives as well. The construction shall be phased and would take place till February 2028.

Moreover, the company has also decided to invest ₹88 crore in brownfield expansions for increasing their HFC capacity by 12.5 ktpa.

Industry outlook and key risks

The company observed that the Chinese supply would still remain an important factor in influencing price trends within the supply chain. On the other hand, there might be volatility within the chemicals industry due to geopolitical factors and the changing tariff policies of the United States.

Regardless of these challenges, SRF’s multi-market approach, coupled with its solid performance and expansion plans, gives it a bright future ahead.