SRF unlikely to get carbon credit income in Sept-qtr

SRF unlikely to get carbon credit income in Sept-qtr

New Delhi: Chemicals and tyre cord maker SRF Ltd does not expect to generate income through carbon credits during July-September, due to a delay in receiving certified emission reductions (CERs), a top company official said on Friday.

“The (CER) issuance process has become very long and we have a huge backlog," Ashish Bharat Ram, managing director, told Reuters in an interview.

“The way things are going, it is unlikely that SRF will get carbon credits issued in the current quarter," he said.

In FY10, SRF’s chemicals business had generated an earnings before interest and tax of Rs276 crore, of which a major portion was from CERs, he added.

The impact of the delay in carbon credits on annual profit will “partly" be offset by new capacity coming on stream in other business segments, Ram said.

SRF, which gets about 40% of its revenue from tyre cord, is seeing a 8-10% decline in volumes in the current quarter due to disruption in production at some tyre makers and also “probably" because of inventory build-up in the system, Ram said.

In value terms, though, the tyre cord business will clock better revenue this quarter on year, as prices were lower last year, Ram said.

The company is looking at growing its chemicals and technical textile business at a faster pace that will change its revenue mix in the next 2-3 years and reduce the tyre cord’s contribution to overall revenue, Ram said.

SRF is also looking for acquisition in Europe and America in its existing businesses, Ram said. “We are more confident of acquiring and turning around businesses overseas after the two acquisitions two years ago," Ram said.

SRF has manufacturing facilities in Thailand, South Africa and the middle east (west Asia).

Shares of SRF, which the market values at Rs1700 crore, closed 0.32% down at Rs284 on Friday on the Bombay Stock Exchange.