Dear Shareholders,
On behalf of the Board of Directors of SRF Limited, I am pleased to
present the annual report for the financial year ended
March 31, 2025.
As we reflect on the fiscal year 2025, we are filled with a profound
sense of pride and optimism. The year has been a testament to our resilience, innovation,
and unwavering commitment to growth. Despite a challenging start, we have navigated
through uncertainties and emerged stronger, achieving significant milestones along the
way.
This year, our theme is:
Augmenting Capabilities. Strengthening the Future.
Despite global geopolitical tensions, tariff uncertainties, and
potential growth slowdowns, our enhanced capabilities have prepared us for success. We
made remarkable achievements in FY25. We have successfully expanded our operations,
introduced innovative, value-added solutions, and strengthened our market position. From
technological advancements to becoming a partner of choice, every milestone achieved this
year has contributed to our overall success and positioned us for a promising future.
Performance Highlights and Future Growth Pathway
In the Chemicals Business, we saw a 6% increase in revenue,
reaching Rs. 6,691 Crores. Our strategic investments in the Chemicals Business over the
past several years, along with an allocation of Rs. 700 Crores for de-bottlenecking and
expansion projects in FY25, have laid the groundwork for increased capital expenditure
intensity, aligning with our future goals and aspirations. These investments have also
fuelled innovative advancements, such as the development of new specialty chemicals and
the commissioning of the third AHF plant at Dahej, which have significantly enhanced our
production capabilities and market competitiveness.
Despite tough market conditions in the first half, our Specialty
Chemicals Business (SCB) segment saw strong performance in the fourth quarter, driven
by new product launches and a gradual pickup in demand for key agrochemical intermediates.
Our cost-competitive pricing strategies and robust export market performance further
supported revenue growth. SCB prioritised advancing customers' new products and
development projects. In FY25, we launched five agrochemical products and three
pharmaceutical products. We focussed on fully utilising production capacities and
optimising cost structures for efficiency. Both Bhiwadi and Dahej improved operational
efficiency while managing a broader portfolio. SCB's expertise in novel chemistries has
grown, and progress in the pharmaceutical sector is encouraging.
The Chemicals Technology Group (CTG) at SRF has made remarkable
strides in FY25, contributing significantly to the company's innovation and growth.
Equipped with state-of-the-art R&D facilities and an ingenious team of scientists and
engineers, CTG has been committed to introducing novel chemistries and building
cost-effective routes for existing and next-generation products in the Specialty Chemicals
and Fluorochemicals Businesses. This has enabled the launch of new products and timely
scale-ups, addressing technological challenges and improving output while reducing costs.
In FY25, CTG worked on over 50 molecules, successfully scaled up many products, filed 38
patents, and had two patents granted, bringing the total to 151 granted patents.
Our Fluorochemicals Business segment also showed resilience,
with positive developments such as strong domestic demand for refrigerants, especially in
H2 FY25, and increased refrigerant gas prices in China. Additionally, inventory levels in
the US have decreased following the implementation of the quota regime.
In our Fluoropolymers journey, we've seen good progress in bulk and
domestic market growth. We are now focussing on ramping up new grades, such as free flow
and fine cuts. The ongoing trials for free flow and fine cut grades are progressing
according to plan. We are also preparing for commercial sales of fine cut products
targeted at high-end application processors in export markets, with expected positive
results beginning in FY26. This is a learning journey, and I believe that the knowledge we
have attained will help us streamline our new fluoropolymer projects at a faster pace.
A major milestone was the commissioning of the third AFIF plant at
Dahej in the fourth quarter of FY25, facilitating maximised production and sales of
refrigerant gases.
We are very optimistic about the prospects of this business, and we are
investing heavily into it. We have recently announced an investment in new manufacturing
facilities, including a project to develop fourth-generation refrigerants with an
estimated investment of Rs. 1,100 Crores.
Additionally, in a testament to our commitment to excellence and
innovation, I am pleased to announce that SRF has been honoured as the champion of
innovation in chemicals and materials science at the DET Hurun India Manufacturing
Excellence Awards 2025.
In line with our commitment to innovation and growth, we are excited to
announce that our Packaging Films Business will now be known as the Performance Films
& Foil Business. This change reflects our expanded capabilities and the broader
range of products and services we now offer. The new name underscores our focus on
delivering high-performance films and foil that meet the evolving needs of our customers.
Our dedication to quality, sustainability, and customer satisfaction remains unwavering as
we continue to lead the industry with cutting-edge solutions.
The Performance Films & Foil Business reported a revenue growth of
24%, reaching Rs. 5,554 Crores. We achieved the highest-ever packed production with
improved margins in both BOPET and BOPP. The commercialisation of new VAPs and the
significant increase in the sale of high-impact VAPs have further
strengthened our position. Additionally, the approval of a new manufacturing facility for
the BOPP-BOPE film line in Indore aligns seamlessly with our sustainability goals. This
project will expand our existing BOPP substrate and VAP offerings and explore the
innovative polyolefin BOPE substrate.
SRF Industries (Thailand) Ltd. was honoured with the Industrial Estate
Authority of Thailand Green Star Award, which is a prestigious recognition for companies
that demonstrate excellence in environmental management, transparency, and good
governance.
In the future, SRF's primary focus will be on significantly increasing
sales of high-impact products across BOPP and BOPET by commissioning new downstream
assets, including offline coating machines in India and metallisers in Thailand and India.
Maximising profitability in the Aluminium Foil Business will be a key priority in the
coming financial year. We will continue to drive sustainability initiatives with the '3R'
approach - Reduce, Reuse, and Recycle. The vertical ramp-up of the newly acquired CPP Line
will enhance our sustainable product offerings due to the monofamily advantage.
Additionally, ensuring smooth commissioning and ramping up of the Capacitor Grade BOPP
Film Line will be a priority.
In the Technical Textiles Business, we recorded a revenue of Rs.
2,029 Crores, up 7% from the previous year. Despite facing margin pressure from low-cost
imports and lactam price fluctuations, we expanded sales in N66 and PTCF products and
successfully commissioned the full BF capacity expansion in Q4FY25.
In the future, we will continue to strive for a better performance by
fully utilising capacities, implementing cost optimisation measures, and providing premium
and value-added products.
Our Coated and Laminated Fabrics Businesses
reported revenues of Rs. 428 Crores. In Coated Fabrics, we expanded
textile capacity with new looms and a warper, set to boost profitability next financial
year. Laminated Fabrics ramped up its new hot lamination machine and will begin producing
its own knitted fabric.
ESG and Our Ongoing Strong Engagement for Our Communities
Sustainability remains a cornerstone of our strategy. Our facilities in
Gummidipoondi and Viralimalai, Tamil Nadu, were awarded a Bronze medal by EcoVadis,
reflecting our commitment to effective resource optimisation and meaningful contributions
to the circular economy.
The SRF Foundation has continued to make significant strides in its
mission to enhance education and community development. In FY25, the Foundation touched
the lives of 1,89,976 students across 493 Government schools. This remarkable achievement
underscores our commitment to improving educational outcomes and providing better
opportunities for students in underserved communities.
One of the key highlights of the year was the laying of the foundation
stone for the SRF School Bharuch. This new institution is set to become a beacon of
quality education in the region, offering state-of- the-art facilities and a nurturing
environment for students to thrive.
Conduding Remarks
Our balance sheet remains strong, and with global interest rates
trending downward, we expect reduced borrowing costs in FY26. We are committed to
strategic investments for long-term growth, with an expected Capex of approximately Rs.
2,500 crore this year.
Reflecting on FY25, we are proud of our team's resilience and
dedication. Despite uncertainties, we believe FY26 will surpass FY25 for the Chemicals
business and the company overall.
Shared Vision: Empowering Our Future
Our team members and management played an integral role, generously
contributing to the positive developments and achievements in FY25. I extend my heartfelt
gratitude and offer a sincere thank you to every single one of our team members for their
support and continued motivation.
I would also like to express my appreciation and thank our shareholders
for your support and confidence in SRF. We look forward to your continued support as we
drive growth and enhance stakeholder value in the upcoming fiscal year. We are committed
to building a future where our augmented capabilities will position us as industry
leaders.
Sincerely,
Ashish Bharat Ram
Chairman and Managing Director SRF Limited