The Hindu Business Line : SRF surges as new plant is ready to go on stream

THE stock of SRF Ltd, a company into industrial synthetics and various fabrics, has been attracting market attention in the last few days due to the company's new polyester film plant going into commercial production in this quarter.

The interest in the stock is also due to the imposition of provisional anti-dumping duty by the Government on nylon cord yarn, a major product for the company.

Analysts said both these factors are expected to benefit the company in the next few quarters.

In the last one week, the stock has gained 20 per cent; in today's trading, SRF gained 5.17 per cent at Rs 54.95 on the BSE with volumes of 7.51 lakh shares and on NSE, it closed at Rs 55.05, up 5.66 per cent, with volumes of 12.51 lakh shares.

Mr Sachin Kasera, Senior Analyst with stock broking firm Pioneer Intermediaries, said: "Company has already started trial runs on its 20,000 tonne per annum polyester film plant and once its goes into commercial production, it will add to the company's topline and bottomline".

A senior SRF official confirmed that its polyester film plant would start commercial production in the current quarter.

He said the company has invested around Rs 120 crore in the plant and currently it will manufacture plain polyester films.

The company's official said the Government has imposed anti-dumping duty (provisional) of 15-20 per cent on nylon cord yarn, which was imported mainly from China.

Analysts said the anti-dumping duty would give a huge relief to SRF.

At the time of its June quarter results, SRF had said that tyre cord fabric business was particularly affected by irrational pricing pressures by Chinese manufactures at one end and increase in raw material cost on the other side.

For the June quarter, profit before interest and tax from this business declined to Rs 7.2 crore from Rs 16.4 crore.