SRF It is a refrigerant and tire window cloth manufacturer that has managed to emerge from its struggles as a dynamic intermediate chemicals manufacturer with niche areas of expertise. Once the company ends its reliance on carbon credits, it will be able to realize a better market valuation, even if it means lower profitability.

The company’s plan clearly identifies the direction of growth. Between fiscal 2006 and fiscal 2013, SRF generated carbon credits by replacing refrigerant production with more environmentally friendly products, thereby increasing annual revenues.

In addition to the prolonged stagnation of refrigerant production, the revenue stream is unclear. The company’s other major business is nylon curtain fabric (NTCF) led to a decline in the company’s market capitalization. However, with the growth of SRF. Investment in specialty chemicals is improving.

Rajendra, an SRF official, said, “So far, we have invested Rs 120 crore in Dahej and commissioned many plants, including commercial chemicals and refrigerants. However, the incremental investment will now focus mainly on high-margin specialty chemicals production capacity.”

The company produces fluoride, a specialty chemical used in the agrochemical and pharmaceutical industries. In addition to fluorine-based specialty chemicals, the company has a leading position in NTCFF R134a and refrigerant gases in many products. We also produce engineering plastics such as polyamides, polybutylene terephthalate (PBT) and polycarbonates. In fiscal 2014, the company established two packaging film plants in Thailand and South Africa.

Carbon credits have dominated the company’s revenues since 2006 since fiscal year, but stopped contributing to the company’s profits in fiscal year 2014. As a result, annual profits fell by 36% to Rs 1,625.5 million. However, net profit more than doubled in the April-June quarter, supporting capacity creation-driven growth.

Prasad “Our investment in specialty chemicals at Dahej (our largest single manufacturing site) is expected to generate 1.8 asset value double the return after the first 18 to 24 1.8 months of the expansion period.” ‘

The majority of these units were commissioned in fiscal 2014, and operating costs are below optimal levels. The increased utilization will help boost the company’s profits in the coming months. Because investors have expressed confidence in the company’s turnaround, SRF’s share price has nearly tripled in the past six months.

The promoters held 52.4% stake in the company and institutional investors eventually increased their shareholding to 23.7%. Compared to 62.4% a year ago, the 20% growth rate in the month has declined. Over the past 12 years. This month, the company is valued at 13 months double its standalone profit. The ability to increase the return on invested capital will be key to maintaining these values in the coming months.