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DCM Shriram Ltd. July 15, 2020

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DCM Shriram Ltd. July 15, 2020

DCM Shriram Ltd

Diversified
FV – Rs 2; 52wks H/L – 537.75/175.8; TTQ – 5133; CMP – Rs 320 (As On July 15, 2020);                     

            Market Cap – Rs 5265 Crs

Consolidated Financials and Valuations (Amt in Rs Crs unless specified)

 
Equity Capital

Net worth
Debt
Total
Sales
PAT
BV
(Rs)

EPS (Rs)

P/E

Industry P/E

P/BV

Promoter’s
Stake
FY20 31.35 4050 2046 7870 717 129 45.7 7 28.61 2.5 66.53
FY19 31.35 3526 1475 7859 906 225 57.8 5.5 28.61 1.4 66.53

 

Debt to Equity – 0.5

ROE – 18%

Market Cap/Sales – 0.7

 The schedule for implementation of capacity expansion at Bharuch for Caustic Soda Plant by 700 TPD (along with 120 MW Captive Power plant and Flaker capacity expansion of 500 TPD) at an investment of Rs.1070 crs is being realigned taking into account the impact of Covid-19.

Overview:

  • DCM Shriram Ltd is a spin-off from the trifurcation of the reputed erstwhile DCM Group.
  • The company’s business portfolio consists of Chloro-Vinyl Business, Agri-Rural Business and other Value-Added Businesses.
  • It is amongst one of the most cost efficient producers of products and services in all its businesses and has been continuously striving for operational efficiency.
  • DCM Shriram, across its various businesses is strategically diversified yet operationally integrated company.
  • Some of the businesses feed others, thereby lowering operation costs and making DCM Shriram a highly competitive player.
  • The continued focus of the Govt. on agriculture & infrastructure is expected to fuel growth of the agricultural & PVC industry in India.

Businesses:

Chloro-Vinyl Businesses:

  1. Chlor- Alkali – DCM Shriram’s Chlor-Alkali (Chemicals) buusiness comprises Caustic Soda (Lye and flakes), Chlorine and associated chemicals including Hydrochloric acid, Stable Bleaching powder, Aluminium Chloride, Compressed Hydrogen and Sodium Hypochlorite. The Company has two manufacturing facilities located at Kota (Rajasthan) and Bharuch (Gujarat) with full coal based captive power. The company’s caustic soda capacity at Bharuch is 1345 TPD and at Kota is 498 TPD.
  2. Plastics Business: A highly integrated business, located at the Kota plant, it involves manufacturing of PVC resins and Calcium Carbide with captive production of Acetylene, Chlorine and Coal based power. Company’s raw carbide capacity stands at 340 TPD and PVC capacity stands at 220 TPD.

Sugar:

capacity of 38,000 TCD. These units have a total power cogeneration capacity of 141 MW and are also supported by 350 KLD of Distillery capacity and a 700 TPD refinery.

 

Agri-Input Businesses:

Shriram Farm Solutions

Bioseed

Fertiliser

 

Other Businesses:

Fenesta Building Systems.

Cement

PVC Compounding

Hariyali Kissan Bazaar

Segment Revenue
Particulars FY20 (%) FY19 (%) % growth
Chlor – Vinyl 29 32 -9
Sugar 32 30 7
Shriam Farm Solution 10 9 11
Bioseed 5 6 -17
Fertiliser 13 13 0
Others 11 10 10

Revenue of Sugar business was up by 7% with higher ethanol volumes as well as better realization of Sugar.

Management:

  • Ajay S. Shriram – Chairman & MD
  • Vikram S. Shriram – Vice Chairman & MD
  • Amit Agarwal – CFO

 

Share Holding Pattern:

Major Holdings:

Non – Promoters No. of shares held % shares held
LIC 10514136 6.74
The New India Assurance Company 1706404 1.09
Stepan Holdings Ltd 7085000 4.54
Ristana Services Ltd 4804550 3.08
Salperton Ltd 1650000 1.06
Turnstone Investments Ltd 1566000 1

 

Share Price Trend:

Share Price Snapshot:

Year Open (Rs.) High (Rs.) Low (Rs.) Close (Rs.)
2010 62.4 69.95 43.35 51.15
2011 52.2 59 37.5 39.75
2012 41 86.4 39.4 68.45
2013 69 73.4 49.1 55.75
2014 57 251.45 51.1 158.55
2015 160.7 161.3 100 133.1
2016 139.2 286.45 107 213.05
2017 214 626.9 211.7 557.9
2018 562.9 628.05 222.55 337.8
2019 338 637 285.05 396.05
2020 400 431.1 175.8 324.15

 

Financials:

Source – Annual Report

The overall operating performance of the Company was stable during the year, with businesses like Sugar, Shriram Farm Solutions, Fenesta and Cement registering growth led by better product prices and volumes. Chlor-Alkali business witnessed a sharp decline in product prices as domestic caustic prices aligned with the international prices.

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