DCM Shriram : Press Release Q3 FY 22_final

For Immediate Release

DCM Shriram Ltd. announces Q3 & 9M FY22 Financial Results

PAT for Q3 FY22 up 38% YoY, PBDIT up 46% YoY

Board Declared Interim dividend of 260%

• Net Revenues* up 26% YoY at Rs 2,730 crs.
  o Growth in revenues led by Chloro-vinyl, Fenesta and Shriram Farm Solutions. o Chloro-Vinyl revenues up 90% YoY at Rs 1,042 crs primarily led by prices. o Shriram Farm Solutions revenues up 13% YoY at Rs 446 crs led by volumes o Fenesta revenues up 26% YoY at Rs 137 crs driven by volumes and prices.
  o Sugar revenues down 14% YoY, at Rs 565* crs primarily due to lower sugar volumes despite better prices, led by lower monthly releases.
  o Cane crush during the current season is higher than same period last year.
• PBDIT up 46% YoY at Rs 614 crs.
  o Chloro-Vinyl PBDIT at Rs 411 crs, up 107% YoY. o Sugar Business PBDIT up 13% YoY at Rs 132 crs.
• Surplus cash net of debt at 31st December, 2021 is Rs. 245 crs vs net debt of Rs 385 crs at 31st December, 2020.
• ROCE came in higher at 27% vs 17% for Dec'20.

New Delhi, 18th January, 2022: DCM Shriram Ltd. announced its Q3 & 9M FY22 financial results today.

* Net of Excise duty of Rs. 61 crs during the quarter.

Q3 FY22 Highlights

			Rs Crs
	Q3 FY22	Q3 FY21	Change (%)
Net revenue from operations	2,730*	2,159	26.5%
PBDIT	614	421	45.9%
PBIT	553	365	51.5%
Finance Cost	17	28	-39.2%
PAT	350	253	38.0%

*Net of excise duty of Rs 61 crs on country liquor sales.

Key Developments and Outlook - Q3 FY22

1. Net Revenues (net of excise duty on sale of country liquor) up 26% YoY at Rs 2,730 crs for the quarter.

• The Revenues were positively impacted by:
   Chemicals business revenues up 115% YoY at Rs 738 crs driven by prices.

1. ECU prices up 126% YoY. Flakes prices also up YoY. ECU prices up 73% QoQ.

• 1. Caustic sales volumes up 8% YoY, also contributed to the revenues. Sales volumes of Hydrogen and Aluminum Chloride were also up.
• Vinyl business revenues up 47% YoY at Rs 304 crs driven by higher prices and higher volumes of Carbide.
• 1. PVC prices up 36% YoY and carbide prices up 94% YoY.

• 1. Carbide sales volumes up 72% YoY. PVC volumes down 4% YoY for lower production of PVC due to higher payback from carbide.
• Fertilizer revenues up 39% at Rs 367 crs resulting from higher gas prices which is a pass through.
• Fenesta revenues up 26% YoY at Rs 137 crs led by both retail and projects segment. Revenues up 5% QoQ. Order booking up 43% YoY.
• Shriram Farm Solutions (SFS) revenues up 13% YoY at Rs 446 crs driven by wheat seed and specialty nutrition products.

1. • The Revenues were negatively impact by:
   • • Overall Sugar business revenues (net of excise duty on country liquor sales) down 14% YoY at Rs 565 crs impacted by lower sugar and distillery volumes.
       o Domestic sugar volumes down 29% YoY at 9.5 lac qtls, impacted revenues by Rs 131 crs. Domestic volumes are regulated by government through monthly releases which were lower YoY. Domestic sugar realizations higher 12% YoY.
       o Distillery volumes down 17% YoY at 267 lac ltrs due to maintenance shut down and lower availability of molasses. Distillery prices higher for current ethanol season.
2. PBDIT for Q3 FY22 up 46% YoY at Rs 614 crs.
3. • PBDIT was positively impacted by:
   • • Vinyl PBDIT at Rs 125 crs, up 24% YoY led by higher prices and carbide volumes. Cost pressures were high, driven by high coal and carbon material costs, which were offset by higher product prices.
     • Chemicals PBDIT at Rs 286 crs up 193% YoY led by prices and volumes. Input costs came in significantly higher, esp. the energy costs, which were more than offset by better prices.
     • Overall Sugar PBDIT at Rs 132 crs up 13% YoY driven by better domestic sugar and Distillery realizations. Lower volumes and higher input costs partially neutralized the upside in the earnings.
     • SFS PBDIT came in higher at Rs 97 crs up 24% YoY.
   • PBDIT was negatively impacted by:
   • • Bioseed PBDIT at -ve Rs 32 crs vs -ve Rs 8 crs for Q3 FY21 impacted by lower volumes in India operations. Q3 is a short season for Indian operations. Inventory provisions/ write-offs were higher.
     • Fertilizer business had lower earnings at Rs 18 crs vs Rs 39 crs during Q3 FY21 due to onetime gain of ~Rs 19.8 crs in Q3 FY21.
4. PAT for Q3 FY22 at Rs 350 crs vs Rs 253 crs during Q3 FY21.
5. Surplus cash net of debt as on 31st Dec, 2021 is Rs. 245 crs vs net debt of Rs 385 crs as on 31st Dec, 2020 and Rs 180 crs on 31st March 2021.

1. • Reduction in net debt is attributed to strong operating cash-flow over last 12 months.
   • There is seasonality in Capital employed which is high during Q4, due Inventory buildup in Sugar and Urea Subsidy.
2. Sugar Season update
3. • Mills started at end of Oct'21/ early Nov'21.
   • Cane crushed for SY22 is 212 lac qtls vs 203 lac qtls for SY21.
   • Recoveries on final molasses for the season stood at 10.6% (SY22) vs 10.7% (SY21).
   • Company started to produce ethanol based on cane juice during the current season.
   • Sugar diverted to cane juice and B-Heavy molasses at 4.3 lac qtls.
4. Second Interim Dividend declared by the Board at 260% amounting to Rs 81.1 crs.

9M FY 22 Highlights

			Rs Crs
	9M FY22	9M FY21	Change (%)
Net revenue from operations	6,832*	6,118	11.7%
PBDIT	1,225	853	43.7%
PBIT	1,048	678	54.6%
Finance Cost	68	97	-30.2%
PAT	666	442	50.9%

*Net of excise duty of Rs 145 crs on country liquor sales.

Key Developments and Outlook - 9M FY22

1. Net Revenues (net of excise duty on sale of country liquor) up 12% YoY at Rs 6,832 crs:

• Net Revenues were positively impacted by:
• • Chemical business revenues up 76% YoY at Rs 1,633 crs driven by both volumes and prices. Volumes up 24% YoY. ECU prices up 52% YoY.
  • Vinyl business revenues up 79% YoY at Rs 822 crs driven by higher prices and volumes. PVC prices up 53% YoY. Carbide prices up 82% YoY. PVC and carbide volumes up 13% YoY and 19% YoY respectively.
  • Fenesta revenues higher 55% YoY at Rs 375 crs led by volumes and prices. Order booking up 58% YoY led by both retail and projects.
  • Chloro-Vinyland Fenesta businesses in Q1 FY21 were impacted by pandemic and lockdown due to Covid-19, resulting in loss of production leading to lower sales. Demand recovered slowly post lock down.
  • Fertilizer revenues up 28% at Rs 880 crs resulting from higher gas prices which is a pass through. Volumes down 10% YoY. Plant operated at lower capacity due to partial break down during Q1 FY22. One time item in current period includes amount of Rs 33 crs received in Q1 FY22 for price revisions relating to previous years and last year revenues include Rs 19.8 crs as arrears recognized for past years.
• Net Revenues were negatively impacted by:
• • Overall Sugar business revenues (net of excise duty on country liquor sales) down 27% YoY at Rs 1,719 crs.