SRF share price crashed 6% in early trade on Wednesday, January 21, slipping to a nine-month low of ₹2,720, as investors were disappointed by the company’s indication that it may miss its earlier FY26 specialty chemicals sales growth guidance, despite a healthy December-quarter performance.
The company reported a 59.6% year-on-year rise in consolidated profit after tax to ₹432.66 crore in Q3, driven by a strong performance in its chemicals vertical. Consolidated total revenue from operations during the third quarter stood at ₹3,712.53 crore, compared with ₹3,491.31 crore in the year-ago period, SRF Ltd said in a regulatory filing on Tuesday.
Looking at the company’s segment-wise performance, the chemicals business posted a revenue of ₹1,824.81 crore, up from ₹1,495.65 crore in the year-ago period.
Within the chemicals segment, persistent weakness in specialty chemicals was once again offset by a strong performance in refrigerant gases amid firm HFC prices and healthy demand.
The specialty chemicals segment was impacted due to aggressive Chinese pricing and deferred offtake by key customers. Against this backdrop, the company indicated that it will not meet its earlier guidance of 20% specialty chemicals sales growth for FY26.
Nevertheless, management expects demand in Q4 FY26 to improve significantly, supported by pent-up orders from Q2 and Q3, despite continued pricing pressure from Chinese competitors.
Domestic brokerage JM Financial expects the company to continue benefiting from tailwinds in the refrigerant gas business. It expects specialty chemicals could see growth from FY27E, while fluorochemicals growth from the Chemours contract and HFO is likely to come in from FY28E.
Meanwhile, the technical textiles business registered a revenue of ₹453.58 crore, down from ₹509.79 crore in the year-ago period, the company said. The performance films and foil business vertical also saw a dip in revenue to ₹1,342.28 crore from ₹1,384.75 crore in the corresponding period last fiscal.
Along with the December quarter results, SRF Ltd said its board, at a meeting held on Tuesday, approved a second interim dividend for FY26 of ₹5 per fully paid-up equity share of ₹10 each, aggregating to ₹148.21 crores.
Brokerages maintain ‘buy’ calls despite near-term estimate tweaks
Factoring in the Q3 FY26 performance, JM Financial has lowered its FY26E–FY28E EBITDA and EPS estimates by 2–3% each. “Additionally, our FY27E–FY28E chemicals EBIT has been revised down by around 2%%. We now bake in nearly 21% chemicals EBIT CAGR over FY26E–FY28E; this, coupled with a valuation rollover, yields a revised SoTP-based March 2027E target price of ₹3,520. We reiterate our ‘buy’ rating,” the brokerage said.
Meanwhile, Motilal Oswal expects the chemicals business—comprising fluorochemicals and specialty chemicals—to maintain its growth momentum going ahead, driven by pent-up orders from Q2 and Q3, the ramp-up of recently commissioned plants, the launch of new products, a strong R&D and innovation pipeline, stable demand for refrigerant gases in international markets and a recovery in domestic demand, and a diversified product portfolio.
The brokerage also retained its ‘buy’ rating on the stock, with a target price of ₹3,660.
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