SRF Limited Q3 FY26 Earnings Call Summary

Summary

SRF Limited - Q3 FY26 Earnings Call Summary Tuesday, January 20, 2026, 4:00 PM IST

Event Participants

Executives 2 Ashish Bharat Ram (Chairman and Managing Director), Nitika Dhawan (Head Corporate Communications)

Analysts 9 Abhijeet Akella (Kotak Securities), Ankur Periwal (Axis Capital), Arjun Khanna (Kotak Mutual Funds), Jason Soans (IDBI Capital), Madhav Marda (Fidelity Investments), Mahima Rathod (Tiger Assets), Meet Vora (Emkay Global), Raghav Chaudhary (Tiger Assets), Sanjesh Jain (ICICI Securities), Surya Narayan Patra (Phillip Capital), Vaishnavi Gurung (Craving Alpha Wealth Fund), Vivek Rajamani (Morgan Stanley)

Financials & KPIs

Geographic & Segment Commentary

• Fluorochemicals: Achieved record quarterly performance driven by firm HFC prices in the US and Southeast Asia. Management highlighted that domestic demand is recovering post-monsoon, positioning the company well for the upcoming peak summer season.
• Specialty Chemicals: Experienced pricing pressure due to “irrational” competition from China and continued deferment of offtake by global agro majors. Despite this, the segment maintains a robust pipeline for new molecules and is expanding its pharma footprint with a new ₹180 crore intermediate plant.
• Packaging Films: Faced headwinds from overcapacity in India and cheap imports; however, signs of recovery emerged in December. The South African operations remain a consistent performer, while Thailand and Hungary continue to face competitive pressures.

Company-Specific & Strategic Commentary

• Pharma Diversification: Management is aggressively derisking from Agrochemicals by scaling the Pharma segment, targeting 20% of Specialty revenue (up from 10% currently). A second Pharma intermediate plant is expected to be commissioned at Dahej within 8 months.
• Kigali Amendment Strategy: SRF is focusing on maximizing HFC production during the 2024-2026 baseline period to secure future quotas. Strategic focus is shifting toward next-generation gases at the new Odisha site to meet upcoming global transition demands.
• Odisha Site Development: The first phase of investment for the new site is estimated between ₹1,500 crore to ₹2,000 crore, primarily housing next-generation refrigerant gas projects.
• R&D & Intellectual Property: Strengthened innovation leadership with 506 total patent applications and 153 granted to date, focusing on complex molecules and process innovations.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Agro Demand & Pricing

• Question: What gives confidence for a Q4 pickup in Specialty Chemicals despite Chinese competition? (Arjun Khanna)
• Answer: Confidence stems from pent-up POs that were deferred in Q2/Q3. Customers are holding lower inventories, and crop protection chemicals are showing early signs of revival (Ashish Bharat Ram).

Kigali Quota & Competition

• Question: How do you view new players entering the HFC/R32 space with large capex? (Raghav Chaudhary)
• Answer: Quotas for 2028 onwards are based on the average production of 2024, 2025, and 2026. Anyone putting up capacity in 2027 will have no baseline for future quotas under the Kigali Amendment (Ashish Bharat Ram).

Packaging Recovery

• Question: Are we seeing margin expansion in BOPP/BOPET? (Arjun Khanna)
• Answer: China has mandated a 20% capacity cutback in BOPET to improve profitability. We have seen price improvements starting December which should reflect in better domestic margins (Ashish Bharat Ram).

Pharma Strategy

• Question: What is the roadmap for the Pharma segment? (Surya Narayan Patra)
• Answer: We aim to double Pharma’s revenue contribution from 10% to 20%. The new ₹180 crore plant will be a non-cGMP facility focused on advanced intermediates (Ashish Bharat Ram).

Key Takeaway

SRF Limited delivered a resilient Q3 FY26, characterized by record performance in the Fluorochemicals segment (22% revenue growth) which successfully offset continued cyclical weakness in Agrochemicals and Packaging. While Specialty Chemicals faced margin compression due to aggressive Chinese pricing and global destocking, the company is strategically pivoting toward Pharma (aiming for 20% revenue share) and next-generation refrigerants. Financial performance was bolstered by a refined tax position and strong HFC realizations, resulting in a 60% YoY PAT increase. Management remains committed to a robust capex cycle of over ₹2,000 crores, primarily directed toward the new Odisha site to capitalize on the post-Kigali transition. Investors should monitor the sustainability of HFC pricing and the timing of the Agrochemical recovery, which is expected to materialize significantly in Q4 FY26.