SRF profit jumps 75.53% YoY, but operating margin slips 3.91 points QoQ
Revenue growth remained strong, though faster expense growth reversed much of the margin recovery seen in Q4FY26.
Filed 22 Jul 2026, 14:49 IST · SRF Ltd (SRF)
Key takeaways
- Consolidated net profit rose 75.53% year on year as revenue grew 31.81% and interest costs fell 14.12%.
- Operating margin fell 3.91 percentage points sequentially because expenses grew 14.43%, faster than the 9.06% revenue increase.
- The stock's initial 2.44% decline was within SRF's 2.86% median absolute move after its last eight results.
Price around the results
YoY profit recovery, sequential margin reset
SRF's consolidated net profit grew 75.53% year on year, with revenue up 31.81% and operating profit up 39.39%. The year-on-year margin improvement of 0.91 percentage points came as expenses grew slightly slower than revenue, while lower interest costs and a 2.42-percentage-point reduction in the tax rate added to profit growth. Other income contributed 3.46% of pre-tax profit, so it was not a major driver of the result. Operating margin remained 3.22 percentage points above the 13.56% median for the 12 Commodities peers that had reported.
Q4 margin recovery was not sustained
The sequential picture was weaker: revenue rose 9.06%, but expenses increased 14.43%, narrowing operating margin by 3.91 percentage points. This followed a sharp margin recovery to 20.69% in Q4FY26, leaving Q1FY27 at 16.78%. The multi-quarter trend shows margin rising from 11.15% in Q2FY26 to 13.70% in Q3FY26 and 20.69% in Q4FY26 before the latest pullback. The sequential tax-rate decline was limited to 0.63 percentage points, while interest costs rose 10.75%.
Management flags stable demand but ongoing cost work
Management said demand for refrigerant gases and propellants is expected to remain stable, while TCF demand is expected to be flat to marginally positive. The company said technology-led cost initiatives helped it sustain market share in key products and that operational-excellence and technology initiatives remain part of its cost-reduction efforts. Management also said Technical Textiles operations were converted from LPG to PNG to improve fuel security and operational resilience, while generic pressure on innovator agrochemical players continues.
Initial stock reaction was within its usual range
The stock fell 2.44% on the results date, with volume at 3.25 times the reference level. That move was close to SRF's recent pattern: four of its last eight results reactions were positive and four were negative, with a median absolute move of 2.86%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹5,033 cr | ₹4,615 cr | +9.06% | +31.81% |
| Other income | ₹34 cr | ₹25 cr | +36.18% | +16.45% |
| Expenses | ₹4,188 cr | ₹3,660 cr | +14.43% | +30.38% |
| Operating profit | ₹845 cr | ₹955 cr | -11.54% | +39.39% |
| Operating margin (%) | 16.78% | 20.69% | — | — |
| Interest | ₹69 cr | ₹62 cr | +10.75% | -14.12% |
| Depreciation | ₹223 cr | ₹220 cr | +1.39% | +9.65% |
| Profit before tax | ₹979 cr | ₹757 cr | +29.33% | +70.04% |
| Tax | ₹220 cr | ₹175 cr | +25.82% | +53.51% |
| Net profit | ₹759 cr | ₹582 cr | +30.39% | +75.53% |
| EPS (₹) | ₹25.60 | ₹19.63 | +30.41% | +75.58% |
Operating margin of 16.78% compares with a Commodities sector median of 13.56% across 12 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.44% | -1.65% |
| Next session | -10.76% | — |
Volume on the results session was 3.25× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Refrigerant gases and propellants are expected to see stable demand.
- TCF demand is expected to be flat to marginally positive.
New initiatives
- Technology-led cost initiatives helped sustain market share in key products.
- The company is continuing cost reduction efforts through operational excellence and technology-driven initiatives.
- Technical Textiles operations were converted from LPG to PNG to improve fuel security and resilience.
Problems & risks
- Generic pressure on innovator agrochemical players continues.
What to watch
- Whether operating margin recovers from 16.78% after the 3.91-percentage-point sequential decline.
- Whether expense growth moderates from 14.43% against revenue growth of 9.06%.
- Whether the tax rate remains near 22.50% rather than repeating the 4.21% level recorded in Q3FY26.