DCM Shriram Q1 net up 34% at Rs 167 crore; sugar, chemicals improve earnings

Net revenue of the company declined by over 19% to Rs 1,442 crore for April-June quarter of FY17

Agri business and farm solutions major DCM Shriram Ltd posted 34% rise in its net profit at Rs 167 crore for the quarter ended June 30, 2016 as compared to Rs 124 crore reported in the corresponding period last year.

Net revenue of the company, however, declined by over 19% to Rs 1,442 crore for April-June quarter of FY17 as against Rs 1,789 crore for the same quarter previous year.

The company delivered a healthy performance during the first quarter of the current fiscal. All businesses, except farm solutions and bioseed, recorded better performance.

"Chloro vinyl businesses continued to deliver improved performance as a consequence of our efforts to strengthen cost competitiveness and grow volumes. Lower input prices also contributed to better performance. Our position will further improve post completion of ongoing capacity expansion and efficiency improvement projects in the chlor - alkali business. We have taken up a project to further enhance chlor - alkali capacity (liquid & flakes) at Kota at an investment of Rs 97 crore. This would be operational in Q3 '18 and will provide further growth to this business," said Ajay Shriram, Chairman & Senior Managing Director, and Vikram Shriram, Vice Chairman & Managing Director, DCM Shriram Ltd.

Sugar business' earnings recovered vis-a-vis last year driven by improvement in the margins. The company is investing on value addition to the by-products and to increase cane availability to further strengthen this business.

By contrast, farm solutions and bioseed businesses were adversely impacted due to delay in onset of monsoons, weak farmer economics and tight funds availability.

The company is confident of delivering healthy growth in the medium term led by expanded capacity and improved cost structure in the chemicals business, higher returns from value addition to sugar by-products and targeted growth in the bioseed and farm solutions businesses.

"Our healthy cash flows and comfortable gearing enable us to undertake growth investments going forward," they added.