DCM Shriram (DCMSHRIRAM) Q4 01/02 earnings summary

Executive summary

• FY2001-02 sales rose over 8% to Rs.1,056.16 crore, while profit before deferred tax fell to Rs.30.47 crore from Rs.41.07 crore amid lower urea allocation and depressed PVC, caustic soda and cement prices.

• Operating initiatives included record PVC resin and caustic soda production, expanded chlor-alkali capacity, growth in agri merchandising and transfer of polymer processing to Shriram PolyTech.

Financial highlights

• Sales and other income was Rs.1,061.98 crore versus Rs.981.22 crore; net sales of products was Rs.1,053.67 crore versus Rs.975.16 crore.

• Operating profit before depreciation, interest, exceptional items and tax was Rs.114.64 crore versus Rs.133.57 crore; net interest fell to Rs.41.57 crore from Rs.49.42 crore.

• Profit after tax was Rs.17.01 crore versus Rs.41.07 crore, including a Rs.13.46 crore deferred-tax provision; profit before deferred tax was Rs.30.47 crore.

• Adjusted for deferred tax, profit was Rs.30.47 crore; a net exceptional gain of Rs.30.75 lakh reflected the demerger gain offset by investment diminution and investment-sale loss.

Outlook and guidance

• First-quarter business sentiment improved, with demand and prices picking up; management expected a better performance in coming years as the business climate improved.

• Fertiliser prospects depend on the new pricing policy; ongoing cost improvements and plant modernisation were intended to maintain competitiveness.

• Agri merchandising planned to increase sales volumes, product range and distribution reach, subject to DAP/MOP subsidy policy constraints.

• Hydrogen bottling expansion was planned; PVC outlook was described as promising, while international commodity price cycles remained a factor.