Will this ailing chemical giant's aggressive capex secure its future?

During the Covid pandemic, the Indian chemical industry found itself like a runner at the starting line. Supply chain disruptions from China created unprecedented opportunities, and Indian companies were ready to surge ahead. Leading the race was SRF Limited , which emerged as the largest chemical company in India by market capitalisation. SRF became a Dalal Street favourite. Between FY20-23, its share price jumped nearly 5.6 times, peaking at a valuation of Rs 83,779 crore in September 2022. However, FY24 brought the gains to a halt. SRF's revenue and profit after tax declined 12 per cent and 38 per cent year-over-year (YoY), respectively, during the year. Its share price declined 9.2 per cent (as of May 27, 2024). SRF's financial performance Profitability took a plunge in FY24 FY24 FY23 FY22 FY21 FY20 FY19 Revenue (Rs cr) 12,910 14,870 12,434 8,400 7,209 7,100 Operating profit (Rs cr) 1,911 2,954 2,586 1,680 1,066 939 CFO (Rs cr) 2,094 2,902 2,106 1,772 1,304 896 EBIT (%) 14.8