DCM Shriram Limited., a chemicals manufacturer based in India announced its results for the third quarter ended December 31, 2020.
Q3 Results- QoQ
The company’s net profit increased 113.4% to Rs 252.55 crores for the period ended December 31, 2020 as against net profit of Rs 118.37 crores for the previous quarter.
Net sales grew 5.4% to Rs 2175.76 crores during the period ended December 31, 2020 as compared to Rs 2064.6 crores during the previous quarter.
Q3 Results- YoY
The company’s net profit grew 44.9% to Rs 252.55 crores for the period ended December 31, 2020 as against net profit of Rs 174.35 crores for the prior-year quarter.
Net sales dropped 2.4% to Rs 2175.76 crores during the period ended December 30, 2020 as compared to Rs 2229.49 crores during the prior-year quarter.
The company approved an investment of Rs 1,000 crore in chemical business for various projects at the existing site of Bharuch (Gujarat) plant.
DCM Shriram will set up a plant to produce Epichlorohydrin (ECH) with a capacity of 51,000 tonnes per annum, along with a glycerine purification facility. It will also produce hydrogen peroxide (H2O2) at a capacity of 52,500 tonnes per annum.
A multipurpose product research and development centre will be set up and the capacity of anhydrous aluminium chloride will be expanded.
“These projects would be financed through internal accruals and debt. The objective of these projects is to enter downstream chemicals linked to the chlor-alkali business of the company,” it said.
The R&D centre is being set up to enable forward integration of existing products and new products i.e. ECH and H2O2. This will also set up the base of the company for other value-added chemicals going forward.
Regarding anhydrous aluminum chloride, the objective of expansion is to meet growing demand and derive economies of scale.
Ajay Shriram, Chairman and Senior Managing Director, said, “the company has witnessed a sequential improvement in its quarterly performance as the challenges posed by COVID-19 reduced. This quarter has been particularly robust, wherein almost all are businesses operated at normal levels.”
“Given our resilient performance in last nine months, our balance sheet strength, stable free cash-flows and the improvement in the economic environment, the board has approved investment in Chemical downstream products of Epichlorohydrine, Hydrogen Peroxide and expansion of Aluminum Chloride,” said Vikram Shriram, Vice Chairman and Managing Director, DCM Shriram.
These steps augur well for growth and strengthening of its chemicals business, said Ajay Shriram.
“Chlor-alkali business continues to face headwinds of supply being in excess of demand leading to subdued prices. Our efforts on cost optimisation in the past and going forward will ensure reasonable margins and competitiveness,” he said.