From a financial point of view, in FY23, SRF’s revenue increased 20% from ₹12,434 crore to ₹14,870 crore over Corresponding Period Last Year (CPLY). The Company’s EBIT increased 13% from ₹2,835 crore to ₹3,193 crore and the Profit after Tax increased 14% from ₹1,889 crore to ₹2,162 crore, over CPLY.
Throughout FY23, the operating environment was characterised by complexity and uncertainty: the volatile international crude oil prices, which led to fluctuation in the prices of certain key raw materials; the low level of demand from customers of our Technical Textiles and Packaging Films Businesses; and the overall macroeconomic and geopolitical upheavals. Having said that, our Chemicals Business performed exceedingly well, both on operating and financial parameters.
SRF’s progress has always been purposeful – beyond profits and always inclusive. Mindfulness in our actions and awareness about the impact of our decisions, have helped us be the changemakers for a better tomorrow. It explains why we chose – ‘Creating Value, the Sustainable Way’, as the theme of our annual report this year. We remain committed to the sustainable growth of our Business.
Backed by a strong sense of purpose, and a clear strategic vision, SRF demonstrated resilience and delivered an exceptional performance in FY23.
From a financial point of view, in FY23, SRF’s revenue increased 20% from ₹12,434 crore to ₹14,870 crore over Corresponding Period Last Year (CPLY). The Company’s EBIT increased 13% from ₹2,835 crore to ₹3,193 crore and the Profit after Tax increased 14% from ₹1,889 crore to ₹2,162 crore, over CPLY.
Let me now talk about some of the milestones achieved by each of our Businesses in FY23.
Our fourth state-of-the-art Multipurpose Plant at Dahej, India
In FY23, the Chemicals Business accomplished strong growth of 41.4% Year-over-Year (Y-o-Y) to achieve record revenues of ₹7,410.9 crore.
Our Specialty Chemicals Business (SCB) performed remarkably well in the year, driven by strong demand in both the export and domestic markets. The basic premise that the world is looking at alternative options to build a reliable supply chain holds true and as a result the value proposition for SCB remains very strong. Our new product portfolio is being enhanced continuously, which also helps us expand and strengthen our customer base further. During FY23, we launched four new products in the agrochemicals space and one product in the pharma segment and our developmental pipeline is stronger than ever before.
The Business continues to make investments towards safer, cleaner, and leaner operations, and further strengthen its sustainability initiatives. During the year, we successfully commissioned our state-of-the-art Multi-Purpose Production (MPP4) facility, a dedicated facility each for agrochemical and pharmaceutical intermediates and a Thermal Oxidation facility at Dahej.
The centrepiece of this sustained growth momentum has been the technological advances and breakthroughs achieved by our team of researchers and scientists. Today, the Chemicals Technology Group (CTG) has transformed into the innovation and technology leadership hub at SRF, developing a variety of new technologies and platforms to bolster SRF into next-level technology play. In this regard, I am pleased to share that in FY23, our R&D and scale-up facilities were further augmented, and a new R&D facility was commissioned to achieve this. With R&D getting integrated in one location at Bhiwadi, we expect further enhancement in the collaborative efforts of our researchers and scientists.
The Fluorochemicals Business (FCB) delivered a solid performance in FY23, owing to higher sales volumes and enhanced realisations in the refrigerants, blends, and chloromethanes segments, in both the domestic and export markets. Our continued focus on growing our export markets, especially in the US has borne fruit.
Moreover, our Dymel® HFA 134a/P (pharma grade) gas continued to expand its presence in several countries and recorded healthy growth. With a solid demand outlook in important markets like India, parts of Europe, US, and the Middle East, we will continue to focus on operating our facilities as efficiently as possible to maintain the business’ dominant market position.
In FY23, our second CMS plant in Dahej was commissioned successfully. At approx. 100,000 Metric Tonnes Per Annum (MTPA), it is one of the largest of its kind plants anywhere in the world. We also commissioned a new captive power plant, which ensures that the Dahej site will not be starved for any of its utility needs, and a calcium chloride plant.
Work on the new HFC plant remains on track and product approvals for the PTFE plant, to be commissioned shortly, are underway. In addition to the above, the Board approved a project to expand our fluoropolymers range beyond PTFE to other specialty fluoropolymers during the year.
In FY23, our second CMS plant in Dahej was commissioned successfully. At approx. 100,000 Metric Tonnes Per Annum (MTPA), it is one of the largest of its kind plants anywhere in the world.
Our second CMS Plant in Dahej
In FY23, our Packaging Films Business witnessed moderate growth of 8.4% Y-o-Y to achieve revenues of ₹5,182.7 crore.
During the year, the Packaging Films Business faced headwinds with several new lines getting operationalised in both the BOPET and BOPP film segments in India and overseas. In addition, a decline in the global demand, coupled with elevated energy costs in Europe adversely impacted our operations in Hungary. We have since seen some moderation in the energy index and are confident of a better performance in FY24. We have also debottlenecked our capacity in South Africa by ~15%, which will give us some added benefits in the year ahead.
I am pleased to share that during the year, we successfully commissioned our 2nd BOPP Film Line and Metalliser at Indore, India. This investment for the expanded BOPP film production means that we are adding another 60,000 MTPA to our existing BOPP capacity of 45,000 MTPA in India. It will further boost SRF’s position in the BOPP market in India and enhance volume growth in the future. It is also a matter of great pride that our Packaging Films Business (Indore) was recognised with the Quality Sustainability Award at the international convention, organised by the International Academy for Quality (IAQ), second year in a row, in recognition of our work in the area of innovating films that have a lower environmental footprint.
Our VAP story remains on track and our Aluminium Foil project is likely to start towards the end of Q2 in FY24. With this project coming on stream, it will make SRF one of a handful of companies globally that provides three of the major substrates — BOPET, BOPP and Aluminium Foil. We believe that the ability to cross sell all three will be unique to SRF.
As demand pivots towards global suppliers with multi-locational facilities, and with our focus on operational efficiencies, cost reduction initiatives to mitigate volatility and our strong customer relationships, we remain cautiously optimistic about the prospects of this Business.
In FY23, our Technical Textiles Business witnessed de-growth of 9.2% Y-o-Y, to close the year with revenues of ₹1,893.9 crore.
Overall, the Technical Textiles Business witnessed a subdued performance, owing to weak demand for the Nylon Tyre Cord Fabric (NTCF), our foundation business segment. Having said that, we are seeing trends for a slight improvement in demand for NTCF. This is based on our interactions with our customers. Our focus will be on ramping up capacity utilisation.
In the future, we will build on the non-tyre market in order to de-risk Technical Textiles Business from NTCF. We expect the demand for Belting Fabrics to grow in the near future due to an increased Government focus on infrastructural development. In this regard, I am pleased to share that a project for capacity expansion and modernisation of Belting Fabrics operations at Viralimalai, India from 1,100 Metric Tonnes Per Month (MTPM) to 1,800 MTPM was approved during the year. This investment will aid in enhancing our market share further and provide a strong margin profile, which is sustainable in the medium-to-long term. In addition, the sales of high-end VAPs and commercialising Solid Woven products will be our focus in the Belting Fabrics segment.
Polyester Industrial Yarn demand is expected to go up with key drivers being geo-textiles and seat belts.
Overall, we expect the Business to experience moderate growth in FY24.
In FY23, our Other Businesses demonstrated promising results of 15.4% Y-o-Y to achieve healthy revenues of ₹392.6 crore.
We achieved the highest-ever EBITDA in the Coated Fabrics Business, maintaining our domestic market leadership in the segment. In the Laminated Fabrics Business too, we managed overall volume and price leadership, despite an over-supply situation in the market that adversely impacted realisations in this segment.
Our People are at the heart of our success and our continuing endeavours to do better. Our HR policies are crafted to ensure professional growth while contributing to the employee’s sense of pride and well-being. Our record employee engagement scores and people practices have also been recognised externally, as highlighted by our recent inclusion on the Fortune ‘Employers of the Future’ list.
Our commitment to the communities we serve has never been stronger. Working in the areas of education, healthcare, skills development, and the bridging of the digital divide between urban and rural India, our programmes are scaling well - in reach as well as depth of impact. Today, these initiatives are touching the lives of over 2 lakh beneficiaries – children, youth, women, and marginalised people.
I believe that our Chemicals Business will continue to do well, and we will target a 20% growth in FY24 as well, which in my view will be exceptional considering the global headwinds that we are seeing. Our Packaging Films Business is expected to have a tough year, but we will find countermeasures as we go along. This is a part-and-parcel of business cycles.
We will continue to invest ahead of time in our Chemicals Business and work towards capitalising the many attractive growth opportunities we see in this Business.
I would like to thank everyone who supported us throughout this eventful year. I am grateful to our customers for entrusting us with their business, to our Board for providing invaluable guidance and to our shareholders for their continued support. I also wish to express my appreciation to our employees, who delivered successful outcomes across the globe. I look forward to the year ahead and am excited about what we can achieve together.
Sincerely,
Read the entire Annual Report 2022-23
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