DCM Shriram (DCMSHRIRAM) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 performance aligned with expectations, with strong growth in chemicals and vinyl, while sugar and ethanol faced margin pressure due to higher costs and lack of exports.

• Net revenue for Q1 FY25 rose 3% year-over-year to INR 2,876 crore, with PBDIT up 49% and PAT up 77% compared to Q1 FY24.

• CapEx in chemicals nearing completion, with new caustic and power capacities commissioned and new plants for hydrogen peroxide and epichlorohydrin expected to enhance efficiency.

• Fenesta and Shriram Farm Solutions maintained growth momentum, while Fertilizers and Cement saw declines due to maintenance and lower prices.

• A 120MW captive power plant was commissioned at the chemical complex in Jhagadia, Gujarat on June 27, 2024.

Financial highlights

• Net revenues (net of excise) for Q1 FY25 were INR 2,876 crore, up from INR 2,780 crore year-over-year.

• PBDIT rose 49% year-over-year to INR 274 crore; PAT reached INR 100 crore, up 77% year-over-year.

• Net debt as of June 30, 2024, stood at INR 1,459 crore, up from INR 926 crore a year ago.

• ROCE for the period was 14.3% (vs 13.6% for FY24).

• Basic/Diluted EPS for the quarter was ₹6.43, up from ₹3.63 in Q1 FY24.

Outlook and guidance

• Expectation of gradual improvement in chemicals business as industry pressures bottom out, with new capacity and power plant to improve efficiency.

• Hydrogen peroxide and epichlorohydrin plants to be commissioned in Q2 and Q3 FY25, with major revenue impact from next year.

• Sugar business faces margin pressure; industry seeks higher MSP and export policy continuity.

• Fenesta aims for growth via new products and geographic expansion.

• Normal monsoon expected to support agri-related businesses.