DCMShriramLtd.announcesitsQ1FY’18financialresults

ForImmediateRelease

DCMShriramLtd.announcesitsQ1FY’18financialresults

Revenuesup36%,NetProfitsup40%



Chemicals sales volumeup 42%,Sugarsalesvolumeup by116%


InvestmentProjects of~Rs350crs underway:
• 150KLD Molasses baseddistilleryto commission by January’18
• Chlor Alkali expansionat Kota to commission byJune’18
• 60 TPD ‘Anhydrous Aluminum Chloride’facility at Bharuch to commission by
June’18

CreditRating–ICRA has upgraded the longtermratingfrom ‘AA-’to‘AA’


NewDelhi, 1stAug2017:DCMShriramLtd.announceditsQ1FY18financial resultstoday.

Q1FY’18Highlights

[Rs.cr]
Q1
FY18 FY17
Totalrevenuefrom operations 2,052 1,514
PBDIT 342 250
PBIT 311 226
FinanceCost 24 20
PAT 233 167



KeyDevelopmentsand Outlook –Q1FY 18


1.  Revenuesgrowthof 36%duringthequarterdueto:
a.  Sugarsalesvolume up by116%
b.  Chemicalssalesvolumeupby42%onaccountofcapacityexpansionatBharuchlast year

2.  PBDITup37%YoYto Rs342croresdueto:

a.  Sugarprofitsupby 205%,aresultof higher salesvolumes

b.  Chemicals profits up by 37% with higher sales volumes and lower costs attributable to adoptionoflatesttechnologyinallproductionfacilities. Marginsarestable

c.  Bioseed–Improvedvolumesin IndiaandInternationalBusiness

d.  OverallPBDITMarginstoodat16.7%vs16.5%in thesameperiodlast year



3.  Finance costsincreasedtoRs24crores fromRs20crores inQ1FY17,postcommissioningofthe investmentprogramof~Rs700crs.


4.  PATincreasedby40%YoY toRs 233croresvs167croreslastyear



5.  GrossDebtatRs. 817croresandNetDebtat Rs.331croresasonJune30,2017



6.  Projectsinvolvinginvestmentsof aboutRs350crsunderimplementation:

- 150KLDMolassesbaseddistilleryatSugarunit; commissioning expectedby Jan’18.
- 80TPDChlor AlkaliexpansionatKota;commissioning expectedby Jun’18.
- 60TPD AnhydrousAluminiumchloride plant at Bharuch; commissioning expected by
Jun’18



7.  CreditRating–ICRAhasupgradedthelongtermratingfrom ‘AA-’to‘AA’andShorttermrating hasbeen reaffirmed at‘A1+’


Commenting ontheperformanceforthequarter, inajointstatement,Mr.AjayShriram,Chairman& Senior ManagingDirector,andMr.VikramShriram,Vice Chairman&ManagingDirector,said:

“ThecompanyachievedsatisfactoryresultsinQ1’18ledbysignificantvolumeandprofitsgrowthin
Chemicalsand Sugar Business.Other businesseswitnessedstableperformance.


The ExpandedChlor-Alkali capacity at Bharuch, is operating satisfactorily. Capacity utilizationis registeringsteady growth.WearepursuingforwardintegrationintoChlorineconsumingchemicalswhich willfurtherstrengthen ourChlor-Alkalibusinesses.Accordingly,theBoardhasapprovedsettingup AluminumChloridebusiness/plantwhichwillbecommissionedbyJune’18.Ourongoing projectto further enhanceChlor-Alkali capacity(liquid &flakes) at Kota isplanned to be commissioned byJune’18.

OurSugarbusinessachieved48%higherproductioninSugarseason2016-17. TheCaneplantingfor season2017-18hasregistered healthygrowth.Thiswouldstrengthenourcompetitiveness through economicsofscaleandhigherrevenues fromco-genpoweraswellasproposeddistillery(tobe commissioned byJanuary’18).

WecontinuetofocusonstrengtheningourChloro-VinylandSugarbusiness.Atthesametimeweare takingstepstogrowourFenestaWindowsbusinessandFarminputsbusinessesi.e.BioseedandFarm Solutions.We expecttosustain overallgood growthof the companyover themedium term”.

Q1FY’18PerformanceOverview&Outlook


CHLOROVINYL:

 Q1FY17revenueupby35%YoY:
oProductionvolumesinChemicalsbusiness45%upconsequentto completionofCapacity expansionatBharuch inQ3FY17
oCapacity utilizationupfrom77%inQ4FY17 to 80%inQ1 FY18attheBharuch Plant
 Earningswereup18%YoYduetohighervolumesandstablemargins
 Powercostswereupdue tohigher coal costs,partiallymitigatedbyimproved efficienciespost expansionandmodernizationof Chemicals
 ECU PricesofChlor-Alkaliimproved(sequentially)duringthequarter


Outlook


 Capacity utilization atBharuchfacilityispickingupgradually,astheChlorine consumption improves
 Pricesof CoalandCarbonmaterialareputtingpressure onmargins;pricesarestablenow
 ExpansionofChemicals atKota ataninvestmentofRs. 97.5crexpectedto commissionbyJun’18
 BoardhasapprovedChlorinedownstreamproject tomanufacture‘Anhydrous Aluminum Chloride’at Bharuchcomplex with an investmentofRs. 43 crore. Commissioningexpected by Jun’18


SUGAR:

 Q1FY18revenueup139%YoYduetohighersugarvolumesat15.8lacquintalsversus7.3lac quintals lastyear
 TotalSugarproductionduringtheSugarseason2016-17at46.4lacquintalsvs.31.3lacquintals
for lastseason.
 Margins improvedascost ofproductionwentdown due tohighervolumes
 Longerseasonaswell asexpandedpowercapacityledtohigherpower income inQ1 FY18

Outlook

 Sugarpricesarestable
 SugarproductioninthenextseasonexpectedtobehigherwithincreaseinSugarcaneacreages andyield
 DistilleryprojectatHariawanunitataninvestmentofaboutRs.185crisprogressingasperplan
andwillcommission by Jan’18

SHRIRAMFARMSOLUTIONS:

 Q1FY18revenuedeclinedby3.5%
 ‘ValueAdded’segment’srevenuestoodlowerby12%vis-à-vislastyear.SalesofCropcare chemicalsandSpecialtyfertilisersdeclined, asthe saleinthemonthofJune’17wasmuteddue to loweroff-takein themarket.
 Business’earningswereimpactedduetodropin volumes

Outlook

 Companyisre-enforcingitsmarketinginitiativesandproduct portfolioexpansiontodrivegrowth
forthe‘ValueAdded’verticalin themediumterm
 Subsidyoutstanding,thattendstobuildupinthesecondhalfoffinancialyearremainanareaof concern



BIOSEED:

 RevenuesinQ1FY18increasedinIndiaaswell asInternationalBusiness
oDomesticrevenues–Increasein revenuesledbycorn, paddy& vegetables
oInternationalRevenues–Allterritorieswitnessedimprovementin revenues
 Earningsimprovementled byvolumesin Indiaandoverseasbusiness
 InternationalBusinessPBDITatRs. 2.8 croresinQ1FY18vs.-vePBDITof Rs. 7.4 croreslastyear

Outlook

 IndiaBusinessexpectedhavemoderategrowthwith stablemargins
 Internationalbusinessexpectedto improveperformance
 Weareworkingonexpandingourproductportfolioandproductofferings,whichwouldprovide stabilityandgrowthovermediumterm



FERTILIZER:

 Ureaproduction9%lowerin Q1FY18vssameperiodlastyear duetoshutdowninApril’17.
 Earningswerelower thanlastyearsincetherewasanimpactofshutdowninthecurrent quarter andtherewasa onetimegain ofRs. 8.7 croresonaccountof SubsidyarrearsinQ1FY17
 Subsidyoutstanding is at Rs. 165crores vs Rs. 347 crores in March’17

Outlook

 Companyisundertakingmeasuresto furtherimproveenergyefficiency
 Subsidyoutstandingtendstobuildupinthesecondhalfoffinancialyear,remainanareaof concern
 Inadequatereimbursement  of  conversion  costs  continues  to  adversely  impact   business’
profitability

OTHERS

FenestaWindowsSystems

 Fenesta business’revenuestood up by27% YoYdriven by highervolumesduring thequarter
 Revenuefrom‘Retail’and‘Projects’ segment upby 17% and56%, respectively, vs. Q1lastyear
 Retailsegment’scontribution torevenuestoodat68% vs 74% inQ1lastyear
 Business’earningsalsoimproved in linewith increasein revenues
 Expansionof fabricationandextrusion capacityprogressingasperplan



CEMENT

 Revenuestoodlowerby10%YoYonaccountoflowervolumesoftradedcement.Ownsales volumeswerehigherby~7%.
 Inputcostincreaseshadanadverseimpact



HARIYALIKISAANBAZAR:

 Revenuesarefromfuelsales only.
 Saleofexisting landparcelsproceedingslowly. Expectedtotakeabout2-3years

Q1FY  ‘18–Segment Performance


Rs.crore

Revenues PBIT PBITMargins%

Segments Q1FY 17 Q1FY18 YoY% Change
Q1FY17 Q1FY18 YoY% Change
Q1FY17 Q1FY18

ChloroVinyl

Sugar

AgriInputs

-ShriramFarmSolutions

-Bioseed

-Fertiliser

Others
372.0
501.4 34.8
121.2
143.0 18.1
32.6
28.5

275.9
659.8 139.1
31.6
108.1 242.4
11.4
16.4

737.9
751.6 1.9
88.6
91.0 2.7
12.0
12.1

286.7
276.7 (3.5)
11.0
10.7 (3.1)
3.8
3.9

280.8
306.5 9.1
60.7
79.3 30.7
21.6
25.9

170.3
168.4 (1.1)
16.9
1.0 (94.0)
9.9
0.6

232.7
237.2 1.9
10.1
10.1 (0.1)
4.3
4.3

Total 1,618.5

Less:Intersegment
Revenue 104.8

Less:Unallocableexpenditure(Net)
2,150.0 32.8

97.9 (6.6)
251.4




25.5
352.3 40.1




41.4 62.1
15.5
16.4
Total 1,513.7 2,052.1 35.6 225.9 310.9 37.6 14.9 15.1