Expect Hariyali business to make profit this FY: DSCL

DCM Shriram Consolidated Ltd's (DSCL) retail arm Hariyali Kisaan Bazaar will start earning profit from this fiscal post-restructuring of business that involves restricting activities to selling only fuels, a top company official said.

The company is also looking at monetising the land bank of Hariyali Kisaan Bazaar of over 275 acres at more than 95 locations.

"We have completed the restructuring process of our retail business Hariyali Kisaan Bazaar. We have reduced our activities to profitable products and decided to sell only fuels through our outlets," DSCL Chairman and Senior Managing Director Ajay Shriram told PTI.

Earlier, Hariyali Kisaan Bazaar was one-stop solution for farmers offering range of products such as farm inputs and FMCG goods among others items with about 300 outlets about three years ago.

The company has now restricted the Hariyali business activities to only marketing fuels sourced from BPCL which stands at 37 outlets in six states.

Asked whether Hariyali will start earning profit from this year, Shriram said: "On month-on-month basis, Hariyali is earning profit. We do not expect any losses this fiscal".

Post-restructuring, DSCL has reduced its losses of Hariyali Kisaan Bazaar to Rs 35 crore in 2012-13 fiscal from Rs 106 crore in the previous year. The revenue also fell to Rs 516 crore from Rs 853 crore during the period under review.

"Organised retail in rural areas is still a challenge. There is a stiff competition from the mom & pop stores," Shriram pointed out.

Asked about the closed stores, Shriram said: "We have 275 acres of land in 95 different locations. We are exploring option on how to extract value from it."

The company had, however, told analysts that it would sell the surplus land, which has been valued at around Rs 220 crore in books of account.

DSCL is expecting growth in all its businesses farm solution, chloro-vinyl, finesta verticals, but is cautious on its sugar and fertiliser business due to government policies.

Shriram said the company is not looking at major expansion this fiscal as it is focusing on improving profitability through increasing efficiency.

"We will continue to spend on maintenance of our plants. Most of the investment will be on expansion of our dealer network and market expansion," he added.

DSCL's net revenues were higher by 10% at Rs 5,539 crore in 2012-13 fiscal. Net profit stood at Rs 203 crore during last fiscal compared with Rs 12 crore in the previous year.