SRF reported mixed Q3 results with consolidated revenue missing consensus estimates amid challenges in its specialty chemicals segment, even as the fluorochemicals business showed resilience. The company's chemicals division, which accounts for nearly half of its revenue mix, continues to face headwinds from Chinese competition.

Financial Performance Overview

The company's Q3 financial metrics fell short of market expectations across key parameters:

Chemicals Business: Tale of Two Segments

The chemicals business, representing 49% of Q3 revenue mix, demonstrated contrasting performance across its two main components. Fluorochemicals delivered solid results with higher realizations and increased volumes of hydrofluorocarbon (HFC) refrigerants. The outlook remains positive as global HFC prices have stayed firm, with management observing recovery in domestic demand after a weak first half due to prolonged monsoons.

Conversely, specialty chemicals remained a significant drag on performance. Growth was hampered by aggressive Chinese pricing strategies, leading to increased margin pressure and deferred offtake by key customers. The segment's challenges reflect broader industry pressures from low-cost competition.

Management Outlook and Revised Guidance

SRF expects the specialty chemicals business to show relative improvement in Q4, driven by strong volume-led recovery supported by pent-up demand and softer raw material prices. However, management indicated it may not achieve its earlier 20% specialty chemicals sales growth guidance for FY26, a development that has concerned investors given specialty chemicals' substantial revenue contribution.

According to JM Financial Institutional Securities, specialty chemicals represented 57% of the chemical business revenue mix in FY25 and is estimated at 56% for FY26. Analysts have tempered growth expectations, with Nuvama Research reducing specialty chemicals growth estimates from 25% to 15% for FY27, citing transitory pressures in agrochemicals.

Operational Challenges Across Segments

Beyond chemicals, other business segments faced their own headwinds:

• Packaging Films: Volumes declined in Q3FY26 with product pricing remaining rangebound amid Chinese dumping, while domestic demand suffered from GST rate rationalization disruption
• Technical Textiles: Pressure in belting fabrics due to cheaper Chinese imports and reduced US exports amid tariffs

Strategic Initiatives and Capacity Expansion

Despite near-term challenges, SRF continues focusing on growth initiatives and capacity additions. The company is maximizing HFC production while ramping up polytetrafluoroethylene capacity, expecting ramp-up from Q1FY27 onward. In specialty chemicals, new pharma intermediates and agro-active ingredients launches are expected to drive future growth.

While the benefits of additional capacity will accrue gradually, near-term performance remains dependent on the specialty chemicals business recovery and the company's ability to navigate competitive pressures from Chinese manufacturers.

SRF Limited has announced a facility for shareholders to apply for reduced or nil Tax Deducted at Source (TDS) on dividend payments. The announcement, made on January 21, 2026, follows the company's dividend declaration from the previous day and provides shareholders with an opportunity to minimize tax deductions on their dividend income.

TDS Relief Facility Details

The company has established a comprehensive system allowing shareholders to submit necessary documentation for TDS relief consideration. This facility enables eligible shareholders to apply for either lower rate TDS deduction or complete exemption from TDS on their dividend payments.

Documentation and Submission Process

SRF has provided detailed guidelines for shareholders seeking TDS relief on dividend payments. The complete list of required documents and submission procedures are available in a dedicated letter posted on the company's official website. Shareholders can access this information at the company's investor relations section to understand the specific requirements for their eligibility category.

Important Timeline for Shareholders

The company has set a strict deadline of January 29, 2026, for document submission. This timeline is crucial for shareholders who wish to benefit from reduced TDS rates, as submissions received after this date may not be processed in time for the dividend payment. The eight-day window from announcement to deadline provides shareholders with adequate time to gather and submit required documentation.

Corporate Communication

The notification was signed by Rajat Lakhanpal, Senior Vice President (Corporate Compliance) and Company Secretary, emphasizing the company's commitment to facilitating shareholder benefits. SRF's proactive approach in providing this facility demonstrates its focus on shareholder-friendly policies and transparent communication regarding dividend-related procedures.