Share of DCM Shriram Limited has delivered 253 per cent returns to its shareholders in one year. The share stood at Rs 339.85 on July 20, 2020. It has zoomed to Rs 1,199 today, translating into gains of 253 per cent during the period. In comparison, Sensex rose 42 per cent in one year.
Rs 5 lakh invested in the midcap share a year ago would have turned into Rs 17.64 lakh today.
The stock rose 18.43 per cent to hit an all-time high of Rs 1,199 on BSE today ahead of the its financial results for the quarter ended June 30, 2021. It has gained 36.52 per cent in the last week and risen 187 per cent since the beginning of this year.
With a market capitalisation of over Rs 19,500 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
"DCM Shriram has provided a nice breakout above its previous swing high of Rs 964. Now, the stock has formed a medium-term or a positional bottom at Rs 865 and till those lows are held the overall trend in the short term remains positive," Jay Thakkar, VP and Head of Equity Research, Marwadi Shares and Finance Limited, told BusinessToday.In.
"The momentum indicator MACD is well in the buy mode at all the degrees i.e. on the daily, weekly, and monthly charts indicating that the overall trend is quite positive. The volumes have also increased since last one week which is also quite positive, so based on these parameters the stock is likely to inch towards Rs 1,200/1,300 levels in the short to medium term," he added.
According to MarketsMojo, the company has a strong ability to service debt as the company has a low Debt to EBITDA ratio of 0.70. The technical trend has improved from Mildly Bullish on January 4, 2021, and the stock is technically in a Bullish range now and has generated a 195.14 per cent return since then. Multiple factors for the stock are Bullish like MACD, Bollinger Band, KST, DOW, and OBV. However, it noted that the valuation is very expensive right now.
The company reported a 15 per cent rise in net profit to Rs 232 crore for Q4 FY21 compared to Rs 201 crore in the corresponding quarter of the previous year. Revenue from operations increased 14 per cent to Rs 2,191 crore for the quarter ended March 2021, compared to Rs 1,917 crore for the corresponding quarter of the previous year.
For FY21, the company posted a net profit of Rs 673 crore compared to Rs 717 crore in the previous year, down 6 per cent. Revenue from operations increased 7 per cent to Rs 8,308 crore compared to Rs 7,767 crore for the previous year.
Vinyl Business revenues were up 109 per cent at Rs 272 crore, driven by PVC prices, up 70 per cent and carbide prices, up 59 per cent. Overall sugar revenues increased 22 per cent on a year-on-year (YoY) basis at Rs 1,021 crore. Chemicals business revenues remained flat at Rs 355 crore.
Net debt as on 31st March 2021 stood at Rs 180 crore as against Rs 1,623 crore as on 31st March 2020. The company informed that the debt reduction was led by lower sugar inventory and significantly lower fertilizer subsidy outstanding. A judicious approach to Capex and working capital across businesses also led to lower net debt.
Recently, the rating agency ICRA reaffirmed the credit rating of the company. The rating on Term Loans has been upgraded from ICRA AA with a Stable outlook to ICRA AA+ (Stable). Also, the company's officials will meet analysts and investors on July 23.
"Mr. Ajay S. Shriram, Chairman and Senior Managing Director, Mr. Vikram S. Shriram, Vice-Chairman, and Managing Director, Mr. Ajit S. Shriram, Joint Managing Director, along with the members of the Senior Management team will represent the Company on the call. The conference call follows the announcement of the company's financial results for the quarter ended June 30, 2021," DCM Shriram said.
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