DCM Shriram Q2 profit up 36% at Rs 63 cr

Revenue rose marginally to Rs 1,439.38 crore in July- September quarter

DCM Shriram today reported a 36% increase in consolidated net profit at Rs 62.96 crore for the second quarter ended September 30, on lower expenses.

The company's net profit stood at Rs 46.30 crore in the year-ago period, DCM Shriram said in a statement.

The Delhi-based firm is engaged in chemical, sugar, fertiliser and seed businesses among others.

Revenue also rose marginally to Rs 1,439.38 crore in July- September quarter from Rs 1,428.46 crore in the corresponding period of the previous year.

During the period under review, the company's expenses declined to Rs 1,353.34 crore from Rs 1,373,95 crore and finance cost fell to Rs 26.52 crore from Rs 29.82 crore.

The board declared an interim dividend of 60%. It also approved a capital expenditure programme of Rs 73 crore in chlor-alkali business to save cost.

Commenting on the development, company's Chairman & Senior Managing Director Ajay Shriram and Vice Chairman & Managing Director Vikram Shriram said: "The performance of the company is satisfactory given the challenges in sugar business, weak agriculture dynamics impacting the agri-input businesses and lower product prices in chloro-vinyl businesses."

Additional levies by central and state governments on coal based power have worsened the situation further, they added.

"Sugar Industry requires comprehensive policy reform urgently to restore its viability. Some recent measures have helped partially, but prices continue to be significantly below costs," Shriram said.

DCM Shriram said that the company continues to focus on strengthening cost competitiveness in all businesses and expanding scale wherever viable.

"Our chlor-alkali capacity expansion project at an investment of Rs 534 crore and sugar co-generation expansion at an investment of Rs 118 crore are progressing as per plan. We have further taken up a plan to optimize the cost structures in chlor-alkali businesses at an investment of Rs 73 crore. All these projects will add to our earnings from financial year 2017 onwards," they said.