Management Discussion & Analysis
In the following pages, the Management will provide its perspective on the operating and financial performance of the Company during FY 2021 - ‘22 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 recognised 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 ninety countries and classifies its businesses as Technical Textiles Business (TTB), Chemicals Business (CB), Packaging Films Business (PFB), and Other Businesses.
Technical Textiles Business
FY 2021 - ‘22 started on a difficult note with lockdown restrictions due to the second wave of COVID-19. However, the Technical Textiles Business (TTB) continued to operate all its manufacturing plants with strict adherence to safety measures resulting in top-notch product quality.
In addition, the Business faced supply chain challenges, but no plants were shut down due to shortage.
Tyre Cord Fabrics (TCF)
Nylon Tyre Cord Fabric (NTCF) segment witnessed strong demand during the first six months of the year due to pent-up demand from replacement and OEM markets. However, in H2, the market witnessed steep decline because of low original equipment (OE) tyre sales and a subdued replacement market. This led to lower capacity utilisation of TCF in H2 FY 2021 - ‘22.
Belting Fabrics (BF)
Steel, cement, coal, and power generation industries are key end-user industries for the Belting Fabrics segment. Each of these industries experienced high growth in FY 2021 - ‘22. These market dynamics led to a significant increase in business volume. The belting fabrics segment also commercialised a few key high-end Value-Added Products (VAPs), which contributed to the Business delivering its best results in FY 2021 - ‘22. Furthermore, the BF segment completed its approved capacity expansion projects in FY 2021 - ‘22.
Polyester Industrial Yarn (PIY)
The Polyester Industrial Yarn (PIY) segment achieved increased volume in FY 2021 - ‘22. Despite an unfavourable product mix, the performance of the segment remained stable. PIY segment will further consolidate its position in FY 2022 - ‘23 and focus on profitable product sales mix.
Outlook
In FY 2022 - ‘23, all trends point to a positive outlook for the Indian economy, infrastructure development, and agricultural growth. This is likely to have a positive affect on the performance of the Technical Textiles Business. We expect an improvement in demand & hence enhanced capacity utilisation.
Management Discussion & Analysis
