- Net Revenue for Q4 FY23 down 3% YoY at Rs 2,720 cr
- Chloro-Vinyl down 21% at Rs 918 cr primarily due to lower product prices
- Sugar business up 24% at Rs 939 cr led by higher sugar & Ethanol volumes
- Fenesta up 13% at Rs 173 cr led by volume growth
- PBDIT for Q4 FY23 down 44% YoY at Rs 372 cr
- Chemicals down 53% at Rs 174 cr led by decline in product prices and continuing higher energy costs
- Vinyl down by Rs 121 cr led by lower product prices and high energy costs
- Sugar business up 10% at Rs 213 cr led by better product prices, especially exports
- One time –ve impact of Rs. 23 crs. on account of provision for Electricity duty on Auxiliary consumption in Rajasthan for prior periods
- Projects: In Sugar, 120 KLD distillery operational. In Chemicals the projects are delayed by a quarter owing to supply chain disruptions
- Growth Going forward - Projects in Sugar business commissioned during H2 of FY’23 (Rs. 530 crs.) and Chemicals business to be commissioned in FY’24 (~Rs. 2900 crs.) to drive growth along with Fenesta Building Systems and Shriram Farm Solutions Businesses
- ROCE at 27% vs 34% LY as a result
According to the company’s website press release on May 2, 2023, DCM Shriram Ltd. announced its Q4 & FY23 financial results.
Key Developments – Q4 FY23
1. Net Revenues (net of excise duty) down 3% YoY at Rs.2,720 cr for Q4 FY23.
Revenue for Chloro-vinyl segment down 21% at Rs 918 cr:
- Chemicals business down 13% YoY at Rs 750 cr driven by prices. ECU realization for Q4 FY23 down 17% YoY. Demand under pressure owing to global recessionary trends and new capacity additions in India.
- Vinyl business down 44% YoY at Rs 168 cr driven by lower prices. PVC prices were down 35% in line with international prices owing to poor global demand from construction sector; Carbide prices were also down 26% YoY.
- Sugar business up 24% YoY at Rs 939 cr on account of higher sugar and distillery volumes and higher prices for both products. Sugar volumes at 16.7 lac qtls against 13.2 lac qtls and distillery volumes at 351 lac ltrs against 334 lac ltrs
- SFS down 41% at Rs 66 cr due to lower volumes in Vegetable seed and wheat seed sales completed in Q3 this year as against till Q4 last year. Also, Q4 is an off season.
- Fenesta up 13% YoY at Rs 173 cr due to higher volumes in project segment. Order booking up 10% YoY for Q4 FY23 driven by both segments
- Fertilizer down 4% at Rs 428 cr resulting from lower gas prices which is a pass through. Volumes up by 4%
- Bioseed up by 38% at Rs 84 cr led by volume growth. Q4 is off season in India.
PBDIT for Q4 FY23 down 44% YoY at Rs 372 cr.
- Chloro Vinyl segment PBDIT at Rs 175 cr, down 64% YOY
- Chemicals at Rs 174 cr vs Rs 369 cr last year led by lower ECUs and elevated energy costs. 120MW power plant & green power plant commissioning will bring down energy costs. New revenue streams to be commissioned in FY’24 to further strengthen the business.
- Vinyl at Rs 1 cr vs Rs 122 cr during same period last year led by significantly lower product prices. Working towards return optimization as carbide giving better returns than PVC.
- Sugar business up 10% at Rs 213 cr, due to better product prices, especially sugar exports. Increase in SAP last year not fully compensated by sugar prices.
- SFS at -ve Rs 11 cr vs Rs 2 cr last year as volumes lower of wheat seed and vegetable seed. This business has seasonality. Full year nos. are better than last year
- Fenesta at Rs 34 cr registered growth of 6%, led by higher volumes in projects & margins in retail and project segment.
- Fertilizer PBDIT at Rs 28 cr vs. Rs 20 cr last year on account of better efficiencies & higher energy prices. Volumes were also up 4%.
- Bioseed at Rs 25 cr loss vs loss of Rs 50 cr last year, led by volumes and higher inventory provisioning/ write offs last year
- PAT for Q4 FY23 down 53% at Rs 187 crs vs Rs 401 crs last year.
- Net debt as at 31st March, 2023 is Rs. 681 cr vs Rs. 4 cr as at 31st March, 2022.
- Projects in sugar business have been commissioned except for approval for grain ethanol operations, which is expected soon. Projects in chemical business are slightly delayed given the supply chain disruptions. These are being funded by mix of debt and internal accruals.
- Final Dividend declared by the Board in this meeting at 180% amounting to Rs 56.14 cr (Total for the year at 700% amounting to Rs 218.32 cr).
Commenting on the performance for the quarter and period ending March 2023, in a joint statement, Mr. Ajay Shriram, Chairman & Senior Managing Director, and Mr. Vikram Shriram, Vice Chairman & Managing Director, said: The world economy is still recovering from the unprecedented disruptions in the last three years. It will take time for world trade to adapt to the new normal. Growth is expected to slow down especially in the advanced economies. Recession concerns have gained prominence, while worries about stubbornly high inflation persist. India continues to be in a sweet spot and will see healthy growth and so will our businesses.
The chloro-vinyl business delivered reasonable returns although they have come off their all-time highs witnessed last year. Though the output prices are expected to remain under pressure for a couple of quarters, the margins should be reasonable considering the captive energy costs likely to reduce in the coming quarters in view of reduced imported coal prices and commissioning of an efficient 120MW power plant and 50MW green power project for Bharuch by second quarter. In the coming year, Chemical business will usher a new era of growth with all the Chemical projects being commissioned. These projects are slightly delayed by a quarter given the supply constraints.
Sugar business continues to be stable though sugar prices have not yet increased to levels to compensate for the increase in sugarcane prices last year. India's crush and sugar production is expected to be much lower than last year and should support higher sugar prices domestically & globally. Our Sugarcane crush as well as recovery this season has been better than previous season. 120 KLD distillery is operational on molasses feedstock, the grain attachment is ready and awaiting regulatory approval, which is expected in Q1FY’24.
Fenesta & Shriram Farm Solution businesses continue to grow at a good rate.
Sustainability measures in the areas of green power, circular economy and resource conservation continue to be an integral part of all our businesses. Our balance sheet & cash flows are healthy and will weather economic uncertainties. We are actively looking for more avenues at growth.
For further information, please contact:
Aman Pannu Head- Corporate Communications DCM Shriram Ltd. +91 9899078610
