DCM Shriram Consolidated tanks after poor Q2 outcome

DCM Shriram Consolidated slumped 13.56% to Rs 56.10 at 12:14 IST on BSE after consolidated net profit declined 95.1% to Rs 1.41 crore on 25.8% growth in net sales to Rs 1684.22 crore in Q2 September 2013 over Q2 September 2012.

The Q2 result was announced after market hours on Monday, 28 October 2013.

Meanwhile, the S&P BSE Sensex was up 89.73 points or 0.44% at 20,660.01.

On BSE, 93,000 shares were traded in the counter as against average daily volume of 9,897 shares in the past one quarter.

The stock hit a high of Rs 60 and a low of Rs 53.10 so far during the day. The stock had hit a 52-week high of Rs 77.95 on 29 October 2012. The stock had hit a 52-week low of Rs 49.10 on 27 February 2013.

The stock had outperformed the market over the past one month till 28 October 2013, surging 10% compared with the Sensex's 4.27% rise. The scrip had also outperformed the market in past one quarter, jumping 23.62% as against Sensex's 4.16% rise.

The small-cap company has equity capital of Rs 33.18 crore. Face value per share is Rs 2.

DCM Shriram Consolidated's profit before interest and tax (PBIT) before exceptional items stood at Rs 40.90 crore in Q2 September 2013 as compared to Rs 71 crore in Q2 September 2012.

Commenting on the performance for the quarter, in a joint statement, Mr. Ajay Shriram, Chairman & Senior Managing Director, and Mr. Vikram Shriram, Vice Chairman & Managing Director, DCM Shriram Consolidated said, "The overall performance of the company for the quarter has been significantly affected due to losses in Sugar Business. The Sugar profits have swung from positive Rs 31.3 crore to negative Rs 24.7 crore, corresponding to the swing in sugar margins from positive Rs 449 per quintal to negative Rs 249 per quintal. The operating environment for the Sugar business particularly in UP is very challenging with State Government fixing very high Cane prices without any linkage with Sugar prices. The resulting high cost structure has made the industry uncompetitive vis-a-vis other States and imports. The Chloro-Vinyl business continues to deliver strong performance. This is a result of our continuous focus on innovative cost reduction measures and firm realizations in Vinyl business. The Agri input businesses continue to hold strong promise and delivered stable earnings. Shriram Farm Solutions' efforts on growing the value-added input segment are yielding results. While our Bioseeds business in India delivered stable growth, higher sales return in the international markets subdued earnings. We believe that these businesses will deliver healthy growth rates in the medium term given strong research program and healthy pipeline of products. In Fenesta, increased retail penetration and cost control over the last one year is translating to better performance. At Hariyali Kisaan Bazaar, the efforts of rationalization are demonstrating results in line with plan. We maintain our view that our business model is strong and efficient and we will deliver noticeably better result, particularly if the Sugar operating structure improves. Besides, with focus on conserving internal cash generation, we are well poised to strengthen our financial positioning going forward".

DCM Shriram Consolidated is an integrated business entity, with presence across the entire Agri-rural value chain and Chloro-Vinyl industry.

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