SRF Q2 FY27: Revenue up 35%, margins tighten

Shares in focus after Q2 FY27 print

Shares of chemicals producer SRF Ltd came into focus after the company reported its Q2 FY27 results for the quarter ended September 2026. The company reported strong year-on-year growth in revenue and profit, but flagged margin pressure during the period. SRF’s consolidated revenue rose 35% year-on-year to ₹4,904 crore, compared with ₹3,640 crore in the year-ago quarter. Consolidated net profit increased 31% year-on-year to ₹509 crore, versus ₹388 crore a year earlier. Total income for the quarter rose to ₹4,929 crore from ₹3,666 crore in the corresponding period last year. Alongside the headline growth, SRF’s profitability ratios weakened as costs and pricing dynamics weighed on margins.

Key consolidated numbers for the quarter

SRF reported consolidated revenue of ₹4,904 crore for Q2 FY27, a 35% year-on-year increase. Sales revenue, described as consolidated sale of products, stood at ₹4,803.31 crore for Q2 FY27 versus ₹3,534.46 crore in the previous year quarter. On profitability, consolidated net profit for the quarter came in at ₹509 crore, marking a 31% year-on-year rise. Profit before tax (PBT) was reported at ₹671 crore, translating to a 14% margin as cited in the slides. The company also reported operational EBIT of ₹816 crore, up 26% year-on-year, with margin at 17% compared with 18% in the prior year period.

EBITDA grows, but margin contracts sharply

SRF’s EBITDA for the quarter increased 25.4% year-on-year to ₹1,009 crore. Despite this growth, the EBITDA margin contracted by 330 basis points to 20.6%. The company’s Q2 FY27 slides referenced margin headwinds from elevated input costs and freight expenses. Operational EBIT margin also softened, with the slides showing 17% versus 18% in the comparable quarter last year. Net profit margin was reported at 10% compared with 11% in Q2 FY26, based on the investor presentation data. Put together, the print reflected a strong top line but a tougher profitability environment.

Chemicals segment: growth on revenue, pressure on profitability

Within the Chemicals segment, SRF recorded 25% year-on-year revenue growth, described as in line with estimates. However, EBITDA in the segment declined 10% year-on-year. The segment’s margin contracted by 220 basis points, according to the provided information. SRF attributed part of the pressure to pricing conditions in specialty chemicals and an oversupply situation from China. The company also noted strong growth in refrigerant gases (Refgas), which helped support the segment’s overall revenue performance even as pricing pressure persisted elsewhere.

How the quarter compared with estimates

SRF’s reported revenue of ₹4,904 crore exceeded a market estimate of ₹4,695 crore, as stated in the provided material. However, net profit of ₹509 crore was below an analyst consensus of ₹598 crore. This gap between revenue outperformance and profit underperformance aligns with the margin commentary in the results and slides. The combined picture suggests that while demand and/or volumes supported revenue, profitability was impacted by input costs, freight, and pricing pressure in parts of specialty chemicals.

Business-unit growth figures cited in the call

In the earnings call transcript, SRF referenced strong growth in specific businesses during Q2 FY27. One business recorded a 51% increase in revenue from ₹1,408 crore to ₹2,122 crore versus the corresponding period last year. Another business reported a 25% increase in revenue from ₹474 crore to ₹594 crore over the comparable period. The transcript excerpts did not label these businesses in the provided text, so SRF’s broader point was that multiple operating lines delivered year-on-year growth during the quarter.

H1 FY27 performance: faster growth in profit

For H1 FY27, SRF reported consolidated revenue of ₹9,937 crore, up 33% over the comparable period last year. Operational EBIT for H1 FY27 increased 44% to ₹1,932 crore. Profit after tax for the first half rose 55% to ₹1,268 crore, as per the earnings call transcript. Compared with Q2 alone, the H1 figures point to stronger cumulative growth in profit and operating metrics, although quarter-specific margin pressure remained a focal point.

Geographic mix highlighted in SRF’s slides

SRF’s investor slides highlighted the geographic distribution of revenue. India accounted for 49% of revenue. The US and EU represented 21%, MEA contributed 7%, and other regions made up 23%. This split provides context on SRF’s exposure to domestic demand and export markets. It also helps explain why global supply conditions, including China-linked oversupply in chemicals, can influence pricing and margins.

Board clears ₹600 crore aluminium foil facility

Beyond the quarterly numbers, SRF’s board approved an investment of approximately ₹600 crore to establish a battery-grade aluminium foil manufacturing facility in India. The material also specified Madhya Pradesh as the location for the new aluminium foil manufacturing plant. While the results commentary centred on chemicals and margins, this capex approval adds a separate strategic development for investors tracking SRF’s manufacturing footprint and planned investments.

Snapshot table: Q2 FY27 vs Q2 FY26

Why the numbers matter for SRF watchers

The quarter underlined a familiar market setup: revenue growth remained strong, but costs and pricing dynamics reduced margin headroom. Specialty chemicals pricing pressure and oversupply from China were cited as key factors affecting segment profitability, while refrigerant gases showed strong growth. For near-term tracking, the key items from SRF’s disclosures are the extent of margin normalisation, movement in input and freight costs, and the impact of industry supply conditions on realisations. Separately, the ₹600 crore aluminium foil project approval is a concrete board-level action investors will monitor for execution timelines and capital deployment.

Conclusion

SRF delivered Q2 FY27 consolidated revenue of ₹4,904 crore and net profit of ₹509 crore, showing 35% and 31% year-on-year growth, respectively, even as margins contracted. Management commentary pointed to input costs, freight, and chemical pricing pressure as near-term headwinds. The next set of updates is likely to be watched for margin trajectory, chemicals segment profitability, and progress on the board-approved ₹600 crore battery-grade aluminium foil facility in Madhya Pradesh.