Diversified group DCM Shriram Ltd on Tuesday reported a marginal increase in its consolidated net profit to Rs 118.37 crore in the second quarter of the financial year 2020-21 on higher sales. Its net profit had stood at Rs 117.73 crore in the year-ago period.
DCM Shriram is into sugar, fertilisers, seeds and chloro-vinyl businesses, among others. Total income increased on a consolidated basis to Rs 2,064.61 crore in the July-September quarter of this year from Rs 1,784.69 crore in the year-ago period, the company said in a regulatory filing. Expenses also remained higher at Rs 1,910.48 crore, compared with Rs 1,636.95 crore a year ago.
"The operating, as well as financial performance of the company, have improved significantly over the previous quarter which was impacted by the effect of the COVID-19 pandemic," its Chairman and Senior Managing Director Ajay Shriram, and Vice-Chairman and Managing Director Vikram Shriram said in a joint statement.
They also added that although the operating challenges due to COVID-19 have reduced, the uncertainty of the economic environment continues.
Investments as well as rationalisation over the past couple of years have strengthened the company's businesses and helped in sustaining a reasonable performance in these challenging times, they added.
Ajay Shriram said the Chiaro-Vinyl businesses have witnessed a healthy increase in volumes since May and are now operating at reasonable levels.
The company has started the implementation of a 120-megawatt coal-based power plant at Bharuch that will improve cost-competitiveness at the chemicals complex at Bharuch, he said.
That apart, the sugar business has increased the scale and forward integration over the past few years, while the agri input businesses have rationalised revenue verticals and improved product offerings, he added. He also said, "Discontinuation of trading in bulk fertilisers and sale of international seeds business in Indonesia and Vietnam have helped in reducing losses and have improved the focus on core business."
These steps have improved performance and augur well for consistent growth of these businesses. The company's balance sheet as well as cash flows are healthy and enable it to continue to focus on building scale, integration and cost-competitiveness in the businesses, he added.
