DCM Shriram
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
DCM Shriram's management has expressed cautious optimism regarding the company's growth trajectory, particularly in its Chemicals division, which is bolstered by ongoing projects in aluminum chloride and calcium chloride. The expansion into renewable energy, with a new agreement to source hybrid renewable energy, is expected to enhance cost competitiveness and energy security. However, challenges such as geopolitical tensions affecting input costs and delayed monsoons impacting the Bioseed segment present headwinds. Vista's financial outlook reflects moderating revenue growth, stable margins, and a strong balance sheet, with a target price of approximately 1,067. The expected upside of nearly 4% indicates limited room for growth in the current valuation context. Industry dynamics, including stabilizing chemical prices and improving pricing power, support DCM Shriram's long-term growth potential. Over the next 12-24 months, key opportunities include the successful commissioning of new chemical facilities and strategic acquisitions, while watchpoints include geopolitical risks and the impact of erratic weather patterns on agricultural segments
Why We Like This Stock
- Expansion in renewable energy capacity enhances cost competitiveness and energy security
- Ongoing projects in aluminum chloride and calcium chloride are expected to strengthen the Chemicals division
- Strategic acquisitions and capacity expansions are likely to drive long-term growth
Things To Watch Out For
- Geopolitical tensions are causing volatility in input costs, impacting margins
- Delayed monsoons are adversely affecting the Bioseed segment's performance
- Increased imports in the PVC market pose challenges to domestic pricing and profitability
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 10,922 | 12,077 | 13,538 | 13,730 | 14,281 |
| Profit Before Tax (Cr.) | 658 | 882 | 969 | 964 | 1,007 |
| PBT Margin | 6.0% | 7.3% | 7.2% | 7.0% | 7.1% |
| Net Profit (Cr.) | 482 | 731 | 821 | 777 | 809 |
| Earnings Per Share | 30.7 | 46.6 | 52.1 | 49.3 | 51.5 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
Show Company Profile
DCM Shriram Limited, together with its subsidiaries, engages in agri-rural, chemicals and vinyl, and value added businesses in India and internationally. It operates through Chemicals and Vinyl, Sugar and Ethanol, Fenesta Building System, Shriram Farm solutions, Fertiliser, Bioseed, and Others segments. The company manufactures poly-vinyl chloride, PVC compounds, carbide, and chlor alkali products; sodium hydroxide, chlorine, hydrogen, sodium hypochlorite, hydrochloric acid, caustic soda, caustic, lye and urea, calcium carbide, aluminium chloride, bleaching powder, and UPVC and aluminium doors and windows; and sugar and ethanol. It is also involved in co-generation and sale of power; provision of plant nutrients, seeds, and pesticides; production of hybrid seeds; offers cement, rural retail, and plaster of paris; operates fuel outlets. The company was incorporated in 1989 and is based in New Delhi, India. DCM Shriram Limited operates as a subsidiary of Sumant Investments Pvt Ltd.