SRF shares dropped 9% on Thursday as investors booked profits, even after the company reported a 76% jump in June quarter profit to ₹759 crore. While revenue grew 32% to ₹4,939 crore across all segments, the stock faced heavy selling pressure. The board also announced a new ₹250 crore investment for a specialized BOPET film production line.
Detailed Coverage
SRF shares witnessed a sharp 9% decline in intraday trading on Thursday, reaching ₹2,617.50 on the BSE. This fall occurred despite a strong financial performance for the first quarter of fiscal year 2027. Investors reacted by selling shares to lock in recent gains, making SRF the top loser in the BSE 150 midcap index for the day.
Strong Q1 Financials
For the quarter ended June 2026, SRF reported a 32% year-on-year increase in revenue, which reached ₹4,939 crore. The company’s profit after tax surged by 76% compared to the same period last year, touching ₹759 crore. Operational efficiency also improved, with EBITDA rising 49% to ₹1,237 crore. This pushed the company's profit margin to 24.6%, reflecting a gain of 280 basis points over the previous year.
Growth was visible across the company's three main segments. The Chemicals business reported revenue of ₹2,315 crore, up 26%, while the Packaging Films division grew 42% to reach ₹2,017 crore. The Technical Textiles segment also contributed with a 28% increase, totaling ₹597 crore.
Investment in Specialty Products
Alongside the earnings report, the company’s board approved a capital expenditure of ₹250 crore to set up a BOPET Thick Film Line in India. This move is aimed at diversifying into specialized substrates for industrial and electronic applications, which could help reduce the company’s reliance on standard commodity films. The project will utilize technology from international equipment manufacturers. Furthermore, the company is continuing smaller expansion projects in its Specialty Chemicals business, specifically targeting increased capacity and improved production efficiency in its agrochemicals portfolio.
Sector Context and Outlook
While the company showed growth, the broader chemical sector continues to face challenges from global overcapacity and price fluctuations. According to management and industry observations, demand in the agrochemical and pharmaceutical sectors has shown signs of softness. However, the company expects the domestic air-conditioning market to support its refrigerant business.
Analysts have noted that SRF’s focus on high-margin specialty chemicals and its ability to substitute imports remain long-term focus areas. The company maintains a strong balance sheet, which supports its ongoing capital spending plans. Investors will now likely track the progress of these new production lines and whether the current softness in the agrochemical segment persists in the coming quarters. The speed of project execution and the ability to maintain current profit margins amidst volatile global pricing will be the primary factors for future monitoring.