DCM Shriram (DCMSHRIRAM) Q4 03/04 earnings summary

Executive summary

• FY 2003-04 was described as strong: reported gross sales rose 28% to ₹1,475.62 crore and standalone PAT increased 35% to ₹76.68 crore; the sugar merger and energy-services demerger make prior-year figures not directly comparable.

• Consolidated net profit was ₹73.40 crore versus ₹53.52 crore; consolidated gross sales were ₹1,556.62 crore.

• Cost rationalisation, capacity utilisation and favourable pricing in plastics and chemicals supported results; plans focus on core capacity growth and higher-value businesses.

Financial highlights

• Standalone gross sales were ₹1,475.62 crore versus ₹1,150.14 crore; operating profit before depreciation, interest and tax was ₹195.09 crore, up over 15% YoY.

• Standalone PBT rose to ₹102.98 crore from ₹75.21 crore; PAT increased to ₹76.68 crore from ₹56.61 crore.

• Consolidated sales were ₹1,556.62 crore versus ₹1,376.01 crore; consolidated PBT was ₹104.03 crore versus ₹70.48 crore and PAT was ₹73.40 crore versus ₹53.52 crore.

• Standalone EPS was ₹45.79 versus ₹33.81; consolidated EPS was ₹43.83 versus ₹31.96.

Outlook and guidance

• Approximately ₹300 crore of capex planned over two years for capacity expansion, technology upgrades, captive power and value-added businesses; funding expected largely through accruals.

• Chlor-alkali capacity planned to rise from 139 TPD to 200 TPD and PVC from 115 TPD to 175 TPD; both projects target 2005 completion.

• Kota power capacity planned to increase from 85 MW to 125 MW by 2006; cement capacity targeted to rise from 2.97 lakh TPA to 4 lakh TPA.

• Hariyali Kisaan Bazaar expansion targets 33 stores within two years; Fenesta plans an all-India rollout.

• Urea feedstock conversion from naphtha to dual feed, including LNG, is intended to reduce costs; management cited unresolved LNG/natural-gas pricing.