Are SRF Ltd. latest results good or bad?

SRF Ltd.'s latest financial results for the quarter ending December 2025 reflect a complex operational landscape. The company reported a net profit of ₹432.66 crores, which represents a significant year-on-year growth of 59.61% compared to ₹271.08 crores in the same quarter last year. This improvement underscores a recovery from previous margin pressures. Revenue for the same period reached ₹3,712.53 crores, marking a year-on-year increase of 6.34%. However, the sequential growth from the previous quarter was modest at 1.99%, indicating that demand conditions may be stabilizing at a lower level.
The operating margin for SRF stood at 21.60%, reflecting a contraction of 30 basis points from the previous quarter, which raises concerns about potential cost pressures or competitive dynamics affecting profitability. In contrast, the profit after tax margin improved by 100 basis points quarter-on-quarter to 11.98%, aided by a significant reduction in the effective tax rate, which may not be sustainable in the long term.

Overall, SRF's financial performance illustrates a company that is navigating through a challenging operating environment while achieving notable profit growth. However, the sequential decline in operating margins and the modest revenue growth may warrant close monitoring. Additionally, the company experienced an adjustment in its evaluation, reflecting the mixed signals from its financial performance. The operational resilience demonstrated in the year-on-year figures is tempered by the emerging headwinds in the current quarter's results.