DCM Shriram plunges 13% on weak March quarter results

The stock plunged 13% to Rs 380 on the BSE after the company reported 68% year-on-year dropped in net profit at Rs 510 million in March quarter.

Shares of DCM Shriram have plunged 13% to Rs 380 per share on the BSE after the company reported 68% year-on-year (YoY) drop in net profit at Rs 510 million in March quarter (Q4FY18), due to poor performance of its sugar business. It had posted profit of Rs 1,560 million in year ago quarter.

Operations revenue was down 3% at Rs 15.66 billion against Rs 16.16 billion in the corresponding quarter of previous fiscal.

The company said sugar volumes declined by 14% due sales restriction by central government. Sugar Prices for Q4FY18 down by 13% YoY, while molasses prices down to almost zero.

Sugar PBDIT (profit before depreciation, interest and tax) turned into negative Rs 1,270 million from positive Rs 1,410 million, it added.

“Sugar business is experiencing difficult price situation with prices significantly below cost. Industry has been pursuing with government for immediate support as well as a rational policy framework. There is need for urgent action in this regard to ensure that farmers’ interests are protected,” Ajay Shriram, Chairman & Senior Managing Director, and Vikram Shriram, Vice Chairman & Managing Director, said on the performance of the company.