1. At a Glance
DCM Shriram just dropped its Q1 FY26 report and… it’s a bit like a thali with too many curries. PAT is down, topline is up, margins are meh, and surprise! They acquired Hindusthan Speciality Chemicals. Welcome to India’s version of Breaking Bad – industrial edition.
2. Introduction with Hook
If DCM Shriram were a Netflix series, it would be “Breaking Margin: The Chemical Chronicles.”
In the last quarter:
- Revenue: ₹3,455 Cr (YoY +19%)
- Net Profit: ₹114 Cr (YoY -40%)
- OPM: A sleepy 9% (vs 15% last year)
Q1 wasn’t a blockbuster, but it wasn’t a horror show either. Think more Saawariya than Kabir Singh.
3. Business Model (WTF Do They Even Do?)
DCM Shriram is basically the Mohanlal of Indian manufacturing—does everything:
- Sugar: 42,400 TCD crushing capacity, 3 ethanol plants
- Fertilisers (Urea): Kota-based, government-regulated pricing
- Chlor-Alkali: Caustic Soda, Chlorine, Hydrogen in Bharuch & Kota
- Vinyl Business: PVC Resin, Cement
- Value-added: Fenesta Windows (yes, really) and Bioseed (hybrid seeds)
The company’s profit drivers are Sugar (sweet sometimes) and Chlor-Vinyl (chemically moody).
4. Financials Overview
| FY / Metric | FY23 | FY24 | FY25 (TTM) |
|---|---|---|---|
| Revenue (₹ Cr) | 11,547 | 10,922 | 12,463 |
| EBITDA (₹ Cr) | 1,606 | 991 | 1,386 |
| Net Profit (₹ Cr) | 911 | 447 | 618 |
| OPM (%) | 14% | 9% | 11% |
| ROCE (%) | 19% | 9% | 11% |
| ROE (%) | 13% | 7% | 9% |
Declining margins = visible pain. But FY25 is showing early signs of stabilization.
5. Valuation
Let’s play the DCF + Peer Multiples Game:
- Current EPS (TTM): ₹39.58
- Assume conservative EPS growth: 8% CAGR
- Fair P/E range (industry median): 18x–22x
- Fair Value Range = ₹1,200 – ₹1,600/share
Current Price: ₹1,389
Verdict: Priced like your favorite dosa at a 3-star hotel—reasonable, but don’t expect Michelin-starred performance.
6. What’s Cooking – News, Triggers, Drama
- Acquisition Alert: Buying Hindusthan Speciality Chemicals (HSC) – potential forward integration into epoxy and resins
- Green Push: More ethanol blending, bio-fuel alignment
- Capex: ₹2,500 Cr lined up for capacity expansion and modernization
- Industry Watch: Sugar MSP review, Caustic Soda price volatility, Urea subsidy changes
- Q1 Commentary: Management admitted margin pressure; focused on long-term structural gains
DCM’s CEO basically said: “Short-term pain. Long-term gain. Please hold the tomatoes.”
7. Balance Sheet
| Item | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Equity | ₹6,162 Cr | ₹6,491 Cr | ₹6,973 Cr |
| Borrowings | ₹1,707 Cr | ₹2,152 Cr | ₹2,529 Cr |
| Net Worth | ₹6,193 Cr | ₹6,522 Cr | ₹7,004 Cr |
| Total Assets | ₹10,720 Cr | ₹11,547 Cr | ₹12,731 Cr |
Key Points:
- Debt growing – funding expansions (CWIP peaked ₹2,600 Cr)
- Still manageable: D/E Ratio ~0.36
- Balance sheet solid but sweating under capex weight
8. Cash Flow – Sab Number Game Hai
| FY / Cash Flow | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | ₹1,296 Cr | ₹794 Cr | ₹1,128 Cr |
| Investing CF | -₹1,543 Cr | -₹1,070 Cr | -₹850 Cr |
| Financing CF | -₹235 Cr | ₹169 Cr | -₹1 Cr |
| Net Cash Flow | -₹482 Cr | -₹107 Cr | ₹277 Cr |
Commentary:
- OCF rebounded in FY25
- Heavy outflows in investing (CWIP + new chemical ventures)
- Financing activity muted—low dividend, selective debt drawdown
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE (%) | 19% | 9% | 11% |
| ROE (%) | 13% | 7% | 9% |
| OPM (%) | 14% | 9% | 11% |
| Debtor Days | 27 | 22 | 28 |
| Inventory Days | 153 | 168 | 162 |
| Cash Conversion | 115 | 124 | 121 |
Verdict:
Not stressy, not sexy—just semi-fit uncle energy.
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 11,547 | 1,606 | 911 |
| FY24 | 10,922 | 991 | 447 |
| FY25 (TTM) | 12,463 | 1,386 | 618 |
Net profit fell off in FY24 like your new year’s resolution. But FY25? It’s back on protein shakes.
11. Peer Comparison
| Company | CMP (₹) | P/E | ROCE (%) | OPM (%) | Sales (Cr) | PAT (Cr) |
|---|---|---|---|---|---|---|
| DCM Shriram | 1,389 | 35.1 | 11.4 | 11% | 12,463 | 618 |
| Godrej Industries | 1,136 | 43.7 | 7.8 | 10.7% | 19,657 | 874 |
| 3M India | 30,210 | 71.5 | 37.0 | 17.3% | 4,445 | 476 |
| Balmer Lawrie | 221 | 14.6 | 14.9 | 12.4% | 2,515 | 259 |
Takeaway: DCM isn’t cheap on P/E, but has scale. Needs margin revival for rerating.
12. Miscellaneous – Shareholding, Promoters
| Shareholder Group | Jun 2025 |
|---|---|
| Promoters | 66.53% |
| FIIs | 4.14% |
| DIIs | 8.04% |
| Public | 20.53% |
Bonus Trivia
- No pledge on promoter holding
- Shareholder count ~59K
- High promoter confidence = Not a pump-and-dump
13. EduInvesting Verdict™
DCM Shriram is like an old ambassador car—low on flash, high on utility, and occasionally surprises you with a nitrous boost (like the HSC acquisition). But earnings need sugar power and Chlor-Vinyl steroids to get into shape again.
Watch Q2 FY26 for:
- Integration of new business (HSC)
- OPM recovery (target >12%)
- Update on green capex and ethanol blending
For now: Packaged boring + strategic drama = Worth a research look.
Metadata
– Written by EduInvesting Team | 21 July 2025
– Tags: DCM Shriram, Specialty Chemicals, Sugar, Chlor-Alkali, EduInvesting Premium
