In the following pages, the Management will provide its perspective on the operating and financial performance of the company during FY 2020- ‘21 and an outlook of the business performance in the coming years.
Businesses
SRF Limited is a chemical based multi-business conglomerate engaged in the manufacturing of industrial and specialty intermediates. The company is widely recognized and well respected for its R&D capabilities globally, especially in the niche domain of chemicals. SRF Limited is a market leader in most of its business segments in India with a significant global presence. The company has operations in four countries namely, India, Thailand, South Africa, and Hungary. SRF has commercial interests in more than seventy-five countries and classifies its businesses as Technical Textiles Business (TTB), Chemicals Business (CB), Packaging Films Business (PFB), and Other Businesses.
Technical Textiles Business
FY 2020- ‘21 began on a difficult note with the entire country under strict lockdown restrictions to control the surge of COVID-19. This resulted in the shutdown of all TTB manufacturing plants. However, as the unlock process started, all plants re-started operations, with strict safety protocols while maintaining product quality. By the end of H1 – 2020 – ‘21, all TTB segments witnessed a strong revival. Increased Government spending in infra sectors, focus on personal mobility, import restrictions on Chinese tyres and container shortage resulting in higher sea freight triggered an increase in domestic demand.
Tyre Cord Fabrics
Nylon Tyre Cord Fabric segment registered strong demand from both Original Equipment (OE) and replacement sectors during H2 – 2020 – ‘21. Restriction in tyre imports from China led to an increase in domestic tyre production across all segments resulting in an overall growth in demand for Tyre Cord Fabrics (TCF). TCF segment also executed yarn capacity expansion and debottlenecking projects in FY 2020- ‘21.
Belting Fabrics
Belting Fabrics segment is a key supplier to end-user industries, namely, steel, cement, coal, and power generation. In FY 2020- ’21, all these industries witnessed a de-growth, thereby resulting in pressure on margins. However, with an increased focus on Value-Added Products (VAPs) and an integrated value chain, the Business was able to increase the overall market share and sales volume to domestic as well as export markets.
With the ongoing expansion projects and a strong portfolio of VAPs, SRF will further consolidate its position in both the domestic as well as the global market in FY 2021- ‘22.
Polyester Industrial Yarn
Polyester Yarn segment witnessed a strong revival in H2 FY 2020 – ’21 due to increased demand from the auto segment and stronger push in infra sectors. The continued focus on increasing sales of VAPs helped keep the margins healthy, despite the Chinese continuing to dump yarn into India at very low prices. The healthy margins trend is expected to continue in FY 2021- ‘22 as well.
Outlook
The Technical Textiles Business is likely to perform well in FY 2021- ’22, owing to a revival in demand of all major end-user industries.