DCM Shriram (DCMSHRIRAM) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 net revenues rose 9% year-on-year to INR 2,957 crore, with PBDIT up 73% to INR 235 crore and PAT up 95% to INR 63 crore, driven by growth in chemicals, Shriram Farm Solutions (SFS), and Bioseed segments.

• H1 FY25 net revenues increased 6% year-on-year to INR 5,834 crore, PBDIT up 59% to INR 509 crore, and PAT up 84% to INR 163 crore.

• Strategic focus on upstream and downstream integration, sustainability, and renewable energy expansion, with 74 MW of new renewable capacity being added.

• Major capex plans in chemicals (downstream projects in aluminum and calcium chloride) and Fenesta (aluminum extrusion facility) to enhance integration and value addition.

• Interim dividend of 100% (INR 31.19 crore) announced.

Financial highlights

• Q2 FY25 net revenues: INR 2,957 crore (up 9% YoY); H1 FY25 net revenues: INR 5,834 crore (up 6% YoY).

• Q2 FY25 PBDIT: INR 235 crore (up 73% YoY); H1 FY25 PBDIT: INR 509 crore (up 59% YoY).

• Chemicals revenue up 19% YoY, PBDIT up 128% YoY, led by higher caustic soda volumes and lower energy costs.

• Sugar and ethanol revenues up 3% YoY; ethanol prices up 10% YoY, but volumes down 18%.

• SFS revenues up 33% YoY, PBDIT up 64% YoY; Bioseed revenues up 24% YoY, PBDIT nearly 6x higher.

• Net debt at INR 302 crore as of September 2024, compared to negative INR 203 crore a year ago and INR 1,434 crore in March 2024.

Outlook and guidance

• Expectation of improved ECU in Q3 as international caustic prices rise and lag effects pass through.

• Commissioning of ECH plant expected by Q4 FY25, with downstream projects in chemicals to be operational by Q1 FY27.

• Anticipation of Ministry of Finance approval for anti-dumping duties on PVC imports, which could benefit domestic pricing.

• Domestic PVC demand expected to improve post-monsoon, with construction and agriculture driving growth.

• Focus on sustainability, green energy, and downstream chemical projects.