SRF Limited: history, ownership, mission, how it works & makes money

A Brief History of SRF Limited

Founded in 1970, SRF Limited has evolved from a textile manufacturer into a multi-business entity. Initially, SRF began its operations producing nylon tire cords, which laid the foundation for its growth. By the mid-1980s, the company diversified into other sectors, including specialty chemicals, packaging films, and technical textiles.

In 1990, SRF Limited established a significant presence in the chemical industry by starting its fluorochemicals division. This strategic move positioned the company among the leading producers of refrigerant gases in India. By 2000, SRF had expanded its footprint internationally, exporting products to markets across Europe and the Americas.

SRF Limited was listed on the Bombay Stock Exchange and National Stock Exchange in India, enhancing its visibility in the capital markets. The company's revenue reported in FY 2022 was approximately ₹8,134 crore, with a notable year-on-year growth of 23%.

In the year ending March 2023, SRF Limited reported a net profit of ₹1,652 crore, representing a profit margin of 20.3%. The earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at ₹2,282 crore, indicating a solid performance across its business units.

SRF continues to focus on innovation and sustainability, investing approximately ₹1,000 crore into research and development over the past few years. This commitment has enabled the company to introduce new products in branded chemicals and specialty products sectors.

In recent years, SRF Limited has also made strategic acquisitions to bolster its portfolio. Notably, in 2023, the company acquired a significant stake in the Italian company, Pirelli, tapping into the European market further.

The global presence of SRF Limited is evident through its production facilities spread across multiple countries, including India, Thailand, and South Africa. The company employs over 7,000 individuals, aligning with its mission to enhance value and strengthen its operational structure.

SRF's stock has shown a consistent upward trend, with the share price reaching approximately ₹2,300 at the close of trading on September 29, 2023. This reflects a significant increase of 55% over the past year, driven by robust financial performance and strategic initiatives.

The company's dedication to corporate social responsibility is also noteworthy. SRF undertakes various initiatives in education, healthcare, and environmental sustainability, positively impacting the communities in which it operates.

A Who Owns SRF Limited

SRF Limited, a leading global player in the chemicals and textiles industry, is publicly traded on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE). As of the latest available data for October 2023, the ownership structure of SRF Limited is detailed below:

The promoter group, led by the Bansal family, holds a substantial portion of the shares, which indicates strong control over the company. Institutional investors play a significant role as well, holding about 30.45% of the total shares, which reflects confidence in SRF's long-term growth.

As per the shareholding data disclosed in the company’s quarterly reports and stock exchange filings, the top institutional shareholders include:

The company's stock has performed well over the past year, with a price increase of approximately 27% year-to-date as of October 2023. The market capitalization of SRF Limited stands at approximately ₹95,000 crore.

In addition to the clear ownership structure, SRF is committed to growth through diversified operations that include specialty chemicals, packaging films, and technical textiles. This diversification strategy is reflected in the company's financial performance, with reported revenue of ₹10,500 crore for FY 2022-23, representing a growth of 15% from the previous fiscal year.

SRF Limited actively engages with its stakeholders, providing transparency in its operations and financial disclosures. This has resulted in a robust shareholder base comprising both institutional and retail investors, contributing to its strong market position.

SRF Limited Mission Statement

SRF Limited aims to be a leading player in the global market with a commitment to innovation, sustainability, and quality in its operations. The company's mission is articulated through its focus on creating value for all stakeholders, including customers, employees, and shareholders, while promoting environmental responsibility.

As of FY 2023, SRF reported consolidated revenues of ₹15,000 crore (approximately $1.8 billion), driven by strong performance across its business segments, including Technical Textiles, Chemicals, and Packaging Films. The company's investment in research and development reached ₹150 crore, reflecting its dedication to innovation.

The company emphasizes sustainable development, with a goal to reduce its carbon footprint by 25% by 2025. In FY 2023, SRF reduced greenhouse gas emissions by 10%. This commitment is further demonstrated by their investments in renewable energy, which accounted for 30% of their total energy consumption.

Furthermore, SRF's mission statement includes a focus on employee welfare. The company launched several initiatives to enhance employee engagement, resulting in a 90% employee satisfaction rate in its latest survey. The workforce as of March 2023 stood at approximately 7,000 employees.

In terms of shareholder value, SRF Limited has delivered a strong return on equity (ROE) of 18% for FY 2023. The dividend payout ratio was 25%, providing a robust return on investment for shareholders.

Overall, SRF Limited’s mission statement reflects its strategy to balance growth with responsibility, ensuring that its operations contribute positively to society and the environment while delivering consistent financial performance.

How SRF Limited Works

SRF Limited is a multi-business entity headquartered in Gurgaon, India. The company operates in three primary segments: Technical Textiles, Chemicals, and Packaging Films. As of the fiscal year 2022-2023, SRF reported a revenue of approximately ₹16,000 crores, representing a year-on-year increase of around 15%.

In the Technical Textiles segment, SRF focuses on manufacturing tire cord fabric and belting fabrics. The company supplies its products to major automobile and industrial players. For FY 2022-2023, this segment contributed about 43% of the total revenue, amounting to approximately ₹6,900 crores.

The Chemicals segment, which includes refrigerant gases like hydrofluorocarbons (HFCs), has been pivotal for SRF’s growth, generating roughly ₹5,500 crores in revenue, which is close to 34% of the total revenue. SRF commands a market share of around 18% in the global HFC market.

In the Packaging Films segment, SRF produces both BOPP and BOPET films. This sector accounted for approximately 23% of total sales, translating to around ₹3,700 crores for FY 2022-2023. The demand for packaging films has surged, aligning with global trends toward more sustainable and flexible packaging solutions.

SRF's strategy emphasizes innovation and expansion. For instance, the company has invested over ₹1,200 crores in capacity expansion and modernization of facilities over the past three years. This commitment to growth has been bolstered by SRF's focus on environmentally friendly practices, aligning with global sustainability goals.

As of September 2023, SRF's market capitalization stood at approximately ₹61,000 crores. The stock has shown resilience with a year-to-date gain of about 18%.

The company has also reported a healthy operating margin of approximately 22% for FY 2022-2023, supported by its cost management initiatives and operational efficiencies. Net profit for the same period was reported at around ₹2,300 crores, reflecting an increase of 20% from the previous year.

SRF Limited's financial strength is further illustrated by its strong return on equity (ROE) of around 14% and a debt-to-equity ratio of 0.52, indicating a balanced capital structure. The company maintains a robust cash flow position, which facilitates ongoing investments and strategies for growth.

In conclusion, SRF's multifaceted operations, commitment to sustainability, and strategic investments position it well within the market, catering to diverse industries while driving financial growth.

How SRF Limited Makes Money

SRF Limited, a leading Indian multinational company, operates in diverse sectors such as chemicals, textiles, packaging films, and technical textiles. The company's revenue primarily comes from its specialized business segments.

Chemicals Segment

The chemicals segment is a significant contributor to SRF's bottom line. In FY 2022-2023, the chemicals segment reported revenue of ₹3,000 crore, representing a growth of 15% year-on-year. This segment focuses on specialty chemicals, including refrigerant gases, which are in high demand due to increasing environmental regulations.

Textiles Segment

SRF's textiles segment offers a wide range of products, including nylon, polyester, and other synthetic fibers. For FY 2022-2023, this segment generated revenue of approximately ₹2,300 crore, accounting for about 30% of the company's total revenue. The increase was fueled by a rise in global demand for technical textiles, particularly in automotive and industrial applications.

Packaging Films Segment

The packaging films segment is another vital source of income for SRF. In the same fiscal year, it recorded revenues of ₹3,500 crore, marking an impressive growth of 20% compared to FY 2021-2022. This growth is attributed to the increasing consumption of packaged goods and the company's focus on innovation to develop high-performance films.

Technical Textiles Segment

SRF's technical textiles segment has shown robust growth, with FY 2022-2023 revenues reaching ₹1,800 crore. This indicates a year-on-year growth of 12%. The segment includes products for industrial applications, such as conveyor belts and automotive components, which are seeing increased demand due to industrial expansion.

Financial Overview

The following table summarizes the revenue contributions from various segments for FY 2022-2023:

Cost Structure

In terms of cost structure, SRF maintains a healthy operating margin. For FY 2022-2023, the company's operating margin was reported at 21%, with a net profit margin of 14%. The cost of goods sold (COGS) was approximately ₹8,000 crore, representing a significant portion of total expenses.

Strategic Initiatives

SRF has undertaken various strategic initiatives to enhance profitability. The company has increased its R&D expenditures, which amounted to ₹250 crore in FY 2022-2023, focusing on sustainable products and technologies. The increased focus on specialty chemicals and product diversification aims to capture higher-margin opportunities in the market.

Market Trends

The global chemicals and textiles markets are witnessing a shift towards sustainability. SRF's emphasis on eco-friendly products aligns with these trends, positioning the company favorably for future growth. Analysts predict that the specialty chemicals market could reach a valuation of USD 1 trillion by 2025, providing a significant growth opportunity for SRF.

Conclusion

Overall, SRF Limited capitalizes on its diversified business model and strategic initiatives to drive revenue across its segments. The company's focus on innovation and sustainability places it in a strong position to adapt to changing market dynamics and consumer preferences.