In the following pages, the Management will provide its perspective on the operating and financial performance of the Company during FY23 and an outlook of the business performance in the coming years.
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 and overseas. 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.
Despite challenges, FY23 has been a stable year for the Technical Textiles Business. In the first half of the year, the TTB witnessed the easing of global supply chain issues. However, the Business faced headwinds in H2 due to cheap imports from China, which impacted business results.
The demand for Nylon Tyre Cord Fabric (NTCF) remained weak during the year due to several factors, including impact of increased radialisation in commercial vehicle Original Equipment (OE) segment, decline in two-wheeler tyre sales, and high imports. In addition, exports were impacted due to unfavourable economic situation in Sri Lanka & Bangladesh.
Having said that, the Business was able to partly offset the drop in NTCF sales volumes with a successful foray into Nylon Yarn sales in the domestic and overseas markets.
In terms of the environmental and social responsibility initiatives, the Business commissioned solar power plants, totalling a capacity of 8.5 MWp, further supporting sustainability and cost reduction.
With healthy growth witnessed in core sectors of coal, steel, cement, and power generation, the demand for Belting Fabrics was strong during the year, registering record production and sales. While cheap imports from China remained a challenge, the BF segment could largely remain insulated due to an increase in the sales of high-end, Value-Added Products (VAPs) and expanded sales to tier-2 customers.
During the year, the BF segment commissioned its Solid Woven plant, further enhancing its product portfolio. In addition, the Board approved a capex for BF capacity expansion from 1,100 to 1,800 Metric Tonnes Per Month within the next three years.
During the year, the demand for PIY remained weak due to aggressive pricing from Chinese manufacturers, resulting in a severe pressure on margins.
In the ensuing months, the PIY segment is looking to consolidate its product mix and is also expected to gain from the projected capacity expansion in FY24.
While we expect to see some green shoots on the back of a resilient Indian economy, the margins of the Tyre Cord Fabrics segment will remain under pressure due to cheap imports from China. We will focus on building our volumes. Having said that, we remain optimistic about the growth of the Belting Fabrics segment as additional capacity comes on stream.
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