InvestorQ : How was the quarterly performance of SRF Ltd for the Dec-20 quarter?
Arusha Ray made post

How was the quarterly performance of SRF Ltd for the Dec-20 quarter?

12 months ago

SRF Ltd, part of the Shriram group of Delhi and specialized in specialty chemicals, reported Q3 PAT down 6.14% yoy at Rs.324 crore on the back of higher tax impact. In terms of top line, it reported 16% growth in revenues at Rs.2,147 crore. The strong top line traction came from the chemicals business and also from its Packaging film business. However, growth in the technical textiles business was tepid.

For the Dec-20 quarter, the company reported operating profits up 49.34% at Rs.450 crore. This was supported on the back of much better revenue traction combined with efficient management of inventories during the Dec-20 quarter. This led to the OPM expanding from 16.27% in the Dec-19 quarter to 20.94% in Dec-20 quarter.

Despite the stellar operating performance, the profit after tax or PAT for the quarter was lower by 6.14% at Rs.324 crore. The one reason responsible for this was the unfavourable tax impact on the bottom line. In the Dec-19 quarter, SRF Ltd had a net tax credit of Rs.86 crore compared to a tax outgo of Rs.120 crore in the Dec-20 quarter. This huge tax dichotomy let to the PAT margins contracting from 18.67% in Dec-19 to 15.11% in Dec-20.