- Net Revenue: INR 2,399 crore, down 12% year-on-year.
- PBDIT: INR 289 crore, down 22% year-on-year.
- Chloro-Vinyl Segment Revenue: INR 691 crore, down 25% year-on-year.
- Chloro-Vinyl Segment PBDIT: INR 64 crore, down from INR 175 crore last year.
- Chlor-Alkali Business Revenue: Down 28% year-on-year.
- Chlor-Alkali Business PBDIT: Down 71% year-on-year.
- Vinyl Business Revenue: INR 153 crore, down 8% year-on-year.
- Vinyl Business PBDIT: INR 14 crore, up from INR 1 crore last year.
- Sugar Business Revenue: INR 879 crore, down 6% year-on-year.
- Sugar Business PBDIT: INR 236 crore, up 11% year-on-year.
- Domestic Sugar Prices: INR 3,857 per quintal, up 10% year-on-year.
- Ethanol Volumes: 375 lakh liters, up 7% year-on-year.
- Fenesta Building Systems Revenue: INR 209 crore, up 21% year-on-year.
- Fenesta Building Systems PBDIT: INR 44 crore, up from INR 34 crore last year.
- Order Book: Over INR 1,000 crore, up 21% year-on-year.
- Fertilizer Revenue: INR 354 crore, down 17% year-on-year.
- Outstanding Fertilizer Subsidy: INR 90 crore.
- Bioseed Revenue: Down 12% year-on-year.
- Bioseed PBDIT: Improved from negative INR 25 crore to negative INR 8 crore.
- Net Debt: INR 1,434 crore as of March 31, 2024, up from INR 681 crore on March 31, 2023.
- Return on Capital Employed: 14%, down from 27% last year.
- Final Dividend: 130%, amounting to INR 40.54 crore.
- Total Dividend for the Year: 330%, amounting to INR 102.92 crore.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DCM Shriram Ltd (BOM:523367, Financial) has tied up INR300 crore towards sustainability-linked loans, demonstrating a strong commitment to environmental sustainability.
- The Sugar and Ethanol business performed better, with domestic sugar prices increasing by 10% year-on-year and ethanol volumes higher by 7%.
- Fenesta Building Systems reported a 21% year-on-year growth in revenues, driven by both volume and price increases, and crossed the INR1,000 crore mark in order bookings.
- Shriram Farm Solutions saw healthy growth across all verticals, including seeds, crop protection, and specialty plant nutrients, supported by enhanced demand generation and sales promotion efforts.
- The company has commissioned an 850 tonnes per day caustic soda expansion, which will add significant economies of scale to the business in the medium term.
Negative Points
- The Chloro-Vinyl segment faced pressure due to disproportionate capacity additions compared to demand growth in the Chlor-Alkali sector and excess global supply in the Vinyl segment.
- Net revenues for Q4 FY24 declined by 12% year-on-year, primarily due to subdued prices and lower volumes in the Chloro-Vinyl segment.
- PBDIT for Q4 FY24 was down by 22%, reflecting the challenges in the Chloro-Vinyl segment.
- The Chlor-Alkali business saw a 28% year-on-year decline in revenue and a 71% drop in PBDIT due to lower ECU realizations and slightly lower volumes.
- The company's net debt increased to INR1,434 crore as of March 31, 2024, up from INR681 crore the previous year, reflecting ongoing capital expenditure and working capital requirements.
Q & A Highlights
Q: The caustic soda import prices have risen by almost 15% to 20% quarter-over-quarter, but there was no major difference in the ECU realization for us. What was the reason for this?
A: Global prices vary by region. Imports from Iran at lower prices impact Western India's market pricing. Additionally, domestic surplus capacity affects local prices despite better international prices. - Ajay Shriram, Executive Chairman
Q: What is the peak debt level planned, and what is the current cost of debt?
A: The current blended cost of debt is around 7.5%. Debt levels will be governed by cash flows, aiming to maintain a debt-to-EBITDA ratio of 1.5x to 2x. - Ajit Shriram, Joint Managing Director
Q: How do you plan to dispose of the additional chlorine from the new caustic capacity?
A: We have a multipronged strategy including captive consumption, long-standing relationships with pipeline customers, and market growth expectations. - Aditya A Shriram, Deputy Managing Director
Q: What is the current situation with caustic soda imports and ECU in April and May compared to Q4?
A: The current ECU in the Western market is around INR 28,000. Imports from Iran continue to pressure domestic prices. - Ajit Shriram, Joint Managing Director
Q: What feedback are you receiving from customers regarding chlorine demand and capacity utilization?
A: Customers are expanding capacities, anticipating demand growth. We expect robust growth in the medium to long term, aligned with GDP growth. - Aditya A Shriram, Deputy Managing Director
Q: What is the contribution of value-added products (VAP) to sales and EBITDA in the caustic soda business?
A: Hydrogen contributed almost 60% to 70% of total EBITDA. Other VAPs like poly-aluminum chloride and SBP are also contributing. - Ajit Shriram, Joint Managing Director
Q: What are the current domestic chlor-alkali capacity and utilization rates?
A: The current capacity is about 5.6 million tonnes with an 80% utilization rate. Our utilization is close to 90%. - Ajit Shriram, Joint Managing Director
Q: Are there any new areas for future capital allocation?
A: We are exploring new growth avenues across all businesses. One area under active evaluation is advanced materials in the epoxy segment. - Aditya A Shriram, Deputy Managing Director
Q: Why did the cost structure for caustic soda increase in Q4 compared to Q3?
A: The cost structure improved, but prices had dropped in December and January, affecting overall performance. - Ajit Shriram, Joint Managing Director
Q: What is the expected ethanol production for the next financial year?
A: We aim for around 18 crore liters, depending on the feedstock used. Our capacity is about 18 crore liters on B-heavy molasses. - Ajit Shriram, Joint Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
