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DCM Shriram share declines 4% post Q4 earnings

DCM Shriram share declines 4% post Q4 earnings

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

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The share price of DCM Shriram fell 4 per cent today after the company reported earnings for the quarter ended March 2021. The stock hit an intraday low of Rs 696.70 and an intraday high of Rs 730.

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 reduction in debt 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.

"FY21 has been a year of disruptions caused by Covid-19. The Company adapted well to these disruptions and delivered a stable operating and financial performance. Almost all our businesses operated at normal levels in the second half of the year," said, Mr. Ajay Shriram, Chairman & Senior Managing Director, and Mr. Vikram Shriram, Vice Chairman & Managing Director, in a joint statement.

They stated that the chemicals business which faced significant challenges for the most part of the year, witnessed increased traction by end of Q4 FY'21. The 120 MW Power plant at Bharuch is expected to be commissioned in Q4 FY'22, which will add to the cost competitiveness of the Chemicals business.

"We have over last 2-3 years invested in Distillery capacities to produce Ethanol. This has provided stability to Sugar Business. Government policies also have played a critical role in giving stability to the industry, we expect the Government to continue the policy framework in the interest of the growth of Industry and farmers," they added.

Further, they said that the capital employed in the fertilizer business has come down significantly with the release of Subsidies by the Government in Q4 FY'21 under the Atma Nirbhar Bharat Package. This should improve the returns in this business on a sustainable basis.

"The economic environment has again become uncertain with the new devastating wave of Covid-19, However, our Balance sheet and Cash flows continue to be strong, which gives us the confidence to handle uncertainties as well as provides us lot of flexibility to invest for future and enhance our growth," they added.