SRF profit rose 10.64% as margin recovered and interest costs fell
The stock's 7.8% post-results gain was unusually large against its past reaction, while management outlined further Odisha and Dahej expansion.
Filed 05 May 2026, 15:57 IST · after market close · SRF Ltd (SRF)
Key takeaways
- Consolidated net profit rose 10.64% year on year to Rs 582.02 cr as interest costs fell 30.69% and the tax rate declined 2.5 percentage points.
- Operating margin recovered 1.21 percentage points sequentially to 22.22% because revenue grew 24.31%, faster than expenses at 22.4%.
- The stock gained 7.8% after the results, well above its 2.86% median absolute move after the past eight results.
Price around the results
Revenue momentum lifted fourth-quarter profit
SRF's consolidated revenue grew 7% year on year, while expenses rose 6.96%, keeping operating profit growth slightly ahead at 7.13%. Sequentially, revenue increased 24.31% and operating profit rose 31.5%, indicating better operating leverage in the quarter. Net profit grew 10.64% year on year and 34.52% sequentially.
Margin recovery came with lower interest costs
The year-on-year operating-margin change was minimal at 0.02 percentage points because expenses tracked revenue closely. Sequentially, revenue grew faster than expenses, widening the margin by 1.21 percentage points. Interest expense fell 30.69% year on year, while the tax rate declined 2.5 percentage points, both supporting net profit. Other income contributed only 1.74% of pre-tax profit, so earnings quality was not materially dependent on it.
Margin reversed a three-quarter slide and stayed above peers
Operating margin had declined from 22.2% in Q4FY25 to 21.01% in Q3FY26 across three consecutive quarters, before recovering to 22.22% in Q4FY26. SRF's margin was 3.45 percentage points above the 18.77% median for the 51 Commodities peers that had reported the quarter.
Management highlighted pharma, refrigerants and Odisha investment
Management said new pharmaceutical product launches had gained initial traction and that volumes were expected to ramp up over the coming years. The company said it plans to maximise HFC production and expand capacity, while refrigerant gases and propellants were expected to see stable demand. The Board approved approximately Rs 2,300 cr of investment at Odisha for a 20,000 MTPA HFO facility and a 30,000 MTPA HF plant, as well as approximately Rs 88 cr of debottlenecking capex at Dahej. Management also said demand for Coated Fabrics remained subdued because of the off-season, while the proposed Rs 490 cr BOPP facility at Indore had been deferred indefinitely.
Market reaction was unusually positive for SRF
The stock rose 7.8% on the first trading session after the results and was up 6.83% after five sessions. That response was larger than the 2.86% median absolute move seen after the past eight results, during which the stock rose three times and fell five times.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,615 cr | ₹3,713 cr | +24.31% | +7.00% |
| Other income | ₹13 cr | ₹-46 cr | — | -61.76% |
| Expenses | ₹3,589 cr | ₹2,933 cr | +22.40% | +6.96% |
| Operating profit | ₹1,026 cr | ₹780 cr | +31.50% | +7.13% |
| Operating margin (%) | 22.22% | 21.01% | — | — |
| Interest | ₹62 cr | ₹66 cr | -5.40% | -30.69% |
| Depreciation | ₹220 cr | ₹217 cr | +1.35% | +12.64% |
| Profit before tax | ₹757 cr | ₹452 cr | +67.62% | +7.03% |
| Tax | ₹175 cr | ₹19 cr | +820.99% | -3.43% |
| Net profit | ₹582 cr | ₹433 cr | +34.52% | +10.64% |
| EPS (₹) | ₹19.63 | ₹14.60 | +34.45% | +10.59% |
Operating margin of 22.22% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +7.80% | +6.56% |
| Next session | +9.85% | — |
| 5 sessions | +6.83% | +9.41% |
| 15 sessions | +8.48% | — |
| 30 sessions | +7.14% | — |
Volume on the results session was 7.62× 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
- New pharmaceutical product volumes are expected to ramp up over the coming years.
- SRF plans to maximize HFC production and expand capacity.
- Refrigerant gases and propellants are expected to see stable demand.
Expansion
- The Board approved increasing investment at the Odisha site to approximately ₹2,300 crore.
- The Odisha investment covers a 20,000 MTPA HFO facility and a 30,000 MTPA new HF plant.
- The Board approved approximately ₹88 crore of debottlenecking capex at Dahej.
- The proposed ₹490 crore BOPP film facility at Indore has been deferred indefinitely.
New initiatives
- The product pipeline was strengthened through customer enquiries in Agro and Pharma segments.
- SRF's AI and intermediate molecules development journey is on track.
Problems & risks
- Demand for Coated Fabrics remained subdued because of the off-season.
What to watch
- Whether operating margin holds above 22.22% after the sequential recovery.
- Whether the tax rate remains near 23.13% after Q3FY26's 4.21% rate.
- Progress on the Odisha investment approved at approximately Rs 2,300 cr.