DCM Shriram investing Rs 3,000 crore in capex after strong show in March quarter

A day after DCM Shriram reported a 73.49 percent growth in its consolidated profit after tax at Rs 401.19 crore for the quarter ended March, president and CFO Amit Agarwal told CNBC-TV18 the company expects the sugar sector to do better with ethanol capacity expanding.

“We are investing about Rs 500 crore in the sugar business, and we expect the business to bounce back. It should happen over a year to a year and a half. The company will also get into the refined sugar business,” Agarwal said.

One of the reasons for the firm's good show in the March quarter was prices in the chloro-vinyl segment going up by 100 percent and retail market prices going up by 50 percent.

The company, the CFO said, had planned a capacity expansion of Rs 3,300 crore. Rs 500 crore in the sugar business and the rest in chemicals. "We expect revenues of Rs 3,000 crore from the new capex," he said.

Total revenue from operations of the company increased by 31.16 percent to Rs 2,873.27 crore during the March quarter compared to Rs 2,190.56 crore in the same period of the previous fiscal. For the full financial year 2021-22, the company's profit after tax increased by 58.58 percent to Rs 1,066.13 crore. In the year-ago period, it stood at Rs 672.26 crore.

The company's total revenue from operations in 2021-22 grew by 18.55 percent to Rs 9,849.41 crore compared to Rs 8,308.16 crore in the previous financial year. The company's shares on Thursday closed at Rs 1,205.95, up 1.29 percent on BSE.