1. At a Glance
When a 100-year-old sugar mill starts building drones, you know Indian capitalism is either evolving—or hallucinating.DCM Shriram Industries Ltd (DCMSRIND), the eclectic descendant of the legendary Daurala Sugar Works, is now dabbling in everything from ethanol to UAVs to rayon tyre cords. The company’s stock is hanging at₹171(as of 4th Nov 2025), with amarket cap of ₹1,486 crore, aP/E of 24.4x, and adividend yield of 1.17%—basically, a sugar stock with a tech startup’s P/E and a PSU’s dividend yield.
But the Q2FY26 results? Oh boy. The company reportedsales of ₹527 croreand anet loss of ₹3.12 crore, which is like spilling sugar in your tea—sweet idea, bitter execution. Revenue fell1.17% YoY, and profit tanked114%, thanks to weak realizations in sugar and inventory drag in industrial fibres. Yet the company’sROCE at 13.7%andROE at 11.8%keep it in the “not dead yet” club.
From ethanol dreams to defense drones, DCM Shriram Industries is juggling so many hats it could start a haberdashery. Strap in—this is one of those Indian midcaps that looks boring on paper until you realize it’s manufacturing UAVs next to molasses tanks.
2. Introduction
Imagine a company boardroom that smells of both burnt sugar and aviation fuel. That’s DCM Shriram Industries Ltd (DCMSRIND) for you—a business empire that decided “diversification” means “everything under the sun, plus a co-generation plant.”
The group’s roots trace back to the pre-independence industrial era, when “DCM” stood for disciplined old-school business values. Fast forward to 2025, and it’s experimenting with defense tech, rayon fibres, and fine chemicals—all while running one of India’s oldest sugar mills. The irony? Its quarterly sugar profit melted faster than sugar in hot chai.
Yet, this isn’t your typical sleepy smallcap. The company is reorganizing through amassive restructuring—splitting its chemical and rayon divisions into separate entities. A move so complex even the NCLT had to take a nap before reserving its order on30 September 2025. CARE Ratings is watching the company like a hawk (or a drone) with arating on Watch with Negative Implications, proving that even the rating agencies can’t resist this corporate drama.
If sugar gives you diabetes, DCMSRIND’s balance sheet might give you adrenaline.
3. Business Model – WTF Do They Even Do?
DCM Shriram Industries runs like a multi-departmental circus—each tent with its own fire juggler.
1) Sugar, Distillery & Power (51% of revenue Q1FY25)At its Daurala Sugar Works (DSW) unit, the company manufactureshigh-purity, double-refined sugar, the fancy stuff used in pharma and FMCG. It also churns outalcohols (rectified, extra neutral, and anhydrous)and runs a94 MW co-gen power plant—because why let molasses go to waste when it can light up Meerut?
However, revenue from this segmentfell 25% between FY22 and FY24. Higher cane prices and policy uncertainty sucked the sweetness out. Sugar output rose slightly to2.273 lakh MT, but profits didn’t follow. Alcohol production declined from31,176 KL (FY22)to30,650 KL (FY24), and FY25’s output is expected to fall further due to lower molasses stocks. The ethanol blending party might have ended before the DJ arrived.
2) Industrial Fibres – Shriram Rayons (29% of revenue Q1FY25)A gem hidden in the chaos. The Shriram Rayons unit manufacturesrayon tyre yarn, treated fabric, and nylon chafer fabric, primarily for tyre companies. Basically, this is the “nylon and fibre” that keeps your MRFs and Apollos together. BetweenFY22 and FY24, revenue surged53%, thanks to better realizations and efficiency gains.
3) Chemicals – Daurala Organics & Chemicals (20% of revenue Q1FY25)This division is the nerdy sibling—making fine chemicals forpharma, agrochem, fragrance, dyes, and coatings. It’s a niche player with30+ productsand grew7% from FY22 to FY24.
4) Defense, UAVs & ContainersNow comes the weirdly exciting part: DCMSRIND’sZEBUdrones. The company tied up withTurkey’s Zyrone Dynamicsand an Israeli partner for counter-drone systems. It’s even setting up adefense equipment plant—because if you can make ethanol, why not make UAVs?
Meanwhile, itsJV with Hyundai Mobismakes containers exported to 25 countries. So yes, DCM Shriram Industries officially sells sugar, spirits, fibres, chemicals, drones, and boxes. Talk about a diversified drink.
4. Financials Overview
Consolidated Figures in ₹ Crore
| Metric | Latest Qtr (Sep’25) | YoY Qtr (Sep’24) | Prev Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 526.85 | 533.08 | 498.59 | -1.17% | 5.67% |
| EBITDA | 9.57 | 45.92 | 43.59 | -79.1% | -78.0% |
| PAT | -3.12 | 22.91 | 16.87 | -113.6% | -118.5% |
| EPS (₹) | -0.36 | 2.63 | 1.94 | -113.6% | -118.5% |
Annualised EPS = -₹1.44 (P/E not meaningful)
Commentary:The September quarter looked like a reality check. EBITDA collapsed from ₹45.9 crore to ₹9.6 crore. That’s not a dip—it’s a nosedive. PAT turned negative, proving sugar volatility can turn a sweet business sour faster than cane juice in Delhi heat.
5. Valuation Discussion – Fair Value Range
Let’s crunch the numbers, just for educational purposes (no target prices, promise).
Current Price:₹171EPS (TTM):₹7.01P/E:24.4xIndustry PE:14.9x
Method 1: P/E ValuationIf we apply 15x (sector average) on EPS ₹7.0 → ₹105/share.If we apply 25x (optimistic smallcap premium) → ₹175/share.
→ Fair Value Range (P/E basis): ₹105–₹175.
Method 2: EV/EBITDAEV = ₹1,725 CrEBITDA (FY25) ≈ ₹144 Cr → EV/EBITDA = 12xIndustry median = 9–11x→ Adjusted fair value = ₹1,400–₹1,650 Cr → ₹160–₹185/share.
Method 3: DCF (Simplified)Assuming 6% growth, 12% discount rate, terminal EV/EBITDA = 9x → range ₹150–₹190/share.
Educational Fair Value Range: ₹150 – ₹185/shareDisclaimer: This fair value range is for educational purposes only and not investment advice.
6. What’s Cooking – News, Triggers, Drama
You thought sugar was volatile? Try restructuring.
- Restructuring Mania (2023–2025):The company approved aComposite Schemeto merge Lily Commercial and demerge chemical and rayon units into new entities:DCM Shriram Fine Chemicals LtdandDCM Shriram International Ltd. The NCLTreserved its order on 30 Sep 2025, so the corporate Rubik’s Cube is still pending.
- CARE Rating Update (Sep 2025):CARE reaffirmed ratings atA+/A1+but slapped a “Watch with Negative Implications.” In corporate language, that’s like saying “we still like you, but don’t mess up.”
- NGT Trouble (Oct 2025):The National Green Tribunal namedShriram Rayonsin a directive. No fines, but definitely a warning shot from Mother Nature.
- Auditor Drama (Nov 2025):Q2FY26 results carried anauditor qualificationciting a₹6.63 crore impairment not recognized. Basically, an accountant’s version of a “subtle threat.”
- COO Exodus (Aug 2024):The Chief Operating Officer resigned, possibly tired of juggling sugar mills and drone wings.
In short, the company has more triggers than a Call of Duty game.
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