DCM Shriram
Stock Snapshot
Price Performance
Vista Outlook
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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
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 10,922 | 12,077 | 13,538 | 13,719 | 14,248 |
| Profit Before Tax (Cr.) | 658 | 882 | 969 | 1,001 | 1,034 |
| PBT Margin | 6.0% | 7.3% | 715.8% | 7.3% | 7.3% |
| Net Profit (Cr.) | 482 | 731 | 821 | 806 | 830 |
| Earnings Per Share | 30.7 | 46.6 | 52.1 | 51.2 | 52.9 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
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DCM Shriram Limited, together with its subsidiaries, engages in chemicals and vinyl, sugar, and value-added businesses in India and internationally. The company operates through Chemicals and Vinyl, Sugar and Ethanol, Fenesta building system, Shriram Farm solutions, Fertiliser, Bioseed, and Others segments. It offers caustic soda lye and flakes, chlorine, compressed hydrogen, and hydrogen peroxide, as well as associated chemicals comprising hydrochloric acid, stable bleaching powder, aluminium chloride, and sodium hypochlorite; and poly-vinyl chloride, carbide, and chlor alkali products. The company also manufactures PVC resins and compounds, and calcium carbide; urea; potash; windows, doors, and facade systems under the Fenesta brand; provides solutions in uPVC and system aluminium windows, WPC and engineered wood doors, and façade systems; sugar and ethanol, as well as engages in the co-generation of power; and produces cement. In addition, it offers a range of agri-inputs, such as seeds, pesticides, specialty plant nutrition products, and crop care chemicals through a network of distributors; hybrid seeds for field and vegetable crops, corn, and paddy; and 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.