Revision in Capital Expenditure
SRF · price
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SRF Ltd's Board has approved a near-doubling of its planned capital expenditure from ₹1,100 crores to ₹2,285 crores for establishing fourth-generation refrigerant production facilities. The enhanced project scope now includes a 20,000 MTPA Hydrofluoroolefins (HFO) plant, a 30,000 MTPA Anhydrous Hydrogen Fluoride (AHF) plant with forward integration into Value-added Hydrogen Fluoride (VHF) products, and associated utilities/infrastructure at Gopalpur, Odisha. The project is targeted for completion by February 2028 and will be funded through a mix of debt and internal accruals. The company cites growing demand for HFOs and VHF products as the driver, aiming to strengthen its position in next-generation refrigerants and integrated fluorochemical value chains.
The near 108% increase in capex from ₹1,100 crore to ₹2,285 crore is a significant financial commitment that will increase SRF's leverage and debt obligations, which could weigh on near-term profitability and free cash flow. However, if the HFO/VHF bet pays off, it could substantially expand SRF's revenue base and margins in the specialty chemicals space.