Diversified agri firm DCM Shriram Ltd on Tuesday (July 23) reported a 77.2 per cent year-on-year (YoY) jump in net profit at Rs 100.30 crore for the first quarter that ended June 30, 2024.
In the corresponding quarter, DCM Shriram posted a net profit of Rs 56.58 crore. The company’s revenue from operations increased to Rs 3,073.02 crore against Rs 2,937.17 crore in the corresponding period of the preceding fiscal.
According to the result presentation, commenting on the performance for the quarter ending June 2024, in a joint statement, Mr. Ajay Shriram, Chairman & Senior Managing Director and Mr. Vikram Shriram, Vice Chairman & Managing Director, said: Global economy continues to be in a state of uncertainty with geopolitical events, trade barriers & climate changes. There have been multiple global logistic issues emanating from China as well as Red Sea, impacting global trade. The central banks have reacted differently over last few months on relaxing interest rates, with EU and Canada cutting interest rates, US on a prolonged pause and Japan raising rates for the first time in past 17 years. Amidst all this, Indian economy continues to be strong, ably supported by policy continuity, fiscal consolidation and inflow of foreign funds. Forecast of a normal monsoon augurs well for the agricultural sector in particular and economy in general.
Global caustic demand remains balanced and India remains net exporter of caustic, with surplus capacity. Our Chemical business has performed better in this quarter as well as sequentially led by higher volumes and reduction in the energy costs. We have commissioned the 850 TPD Caustic capacity and 120 MW captive power plant, both these will add to scale and cost efficiencies. Given the steady growth in the downstream/consuming industries, we expect positive outlook for the business over the medium term.
Sugar business is stable but facing margin pressures. Current sugar prices are yet not commensurate to the increase in cost of production due to increase in SAP and adverse weather conditions. Ethanol business is stable, the growth of this vertical is subject to availability of feedstock. There is a need for better policy framework on grain based feedstock.
Fenesta Building Systems and Shriram Farm Solution businesses continue to maintain their growth momentum. Our capex in Chemical business is nearing completion. Hydrogen Peroxide Plant has started trial runs and ECH plant is expected to start trial runs by Q2 FY25. Expansion of sugar capacity and CBG project in Sugar business are progressing as per schedule.
Sustainability remains at the core of our business strategy for guiding our actions & decisions. We prioritize our actions in the sphere of water conservation, energy conservation, green energy, circular economy and social upliftment to create lasting value for our stakeholders. Our growth agenda is directed towards evaluating adjacencies in our core businesses which will strengthen and enhance our portfolio.
In a result presentation, speaking on outlook for sugar and ethanol sector, company said, “Global sugar demand and supply expected to be balanced. Industry is pushing for increase in MSP of sugar & continuity in policy – allowing exports, availability of feedstock for ethanol shall help to improve the margins further.”
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