DCM Shriram Limited’s chemical projects under execution are getting impacted given the significant rise in commodity price and even execution may see delays of about 2-3 months, impacted by 2nd and 3rd wave of Covid-19 and excessive/untimely rains though the returns on the project continue to be healthy.

Commenting on the performance for the quarter, Ajay Shriram, Chairman & Senior Managing Director, and Vikram Shriram, Vice Chairman & Managing Director said, “This quarter was very challenging for our businesses. High and volatile commodity prices along with supply constraints made the operating environment very dynamic for Chloro-vinyl and Fenesta businesses. Erratic rains made supply chain management difficult for our Agri inputs businesses. We are glad that overall our businesses did well despite these challenges. Chloro-Vinyl business witnessed almost unidirectional increase in input costs especially energy prices. This was led by global factors such as increase in energy demand, supply constraints due to geo-political factors and adverse weather conditions. Freight costs are also adding to the cost push. However, globally the product prices have responded well to the increase in Input costs. Operating environment continues to be dynamic. Chemical expansion and downstream projects are facing headwinds from commodity price increase as well as marginal delays due to the 2nd and 3rd wave of Covid-19 and extensive rains.”

“Our cash-flows are healthy which continue to strengthen our balance Sheet. For the next quarter we are bracing ourselves for another challenge in terms of the third wave of Covid-19 pandemic,” added Ajay Shriram and Vikram Shriram.

Net Revenues up 26% YoY at Rs. 2,730 crores for Q3 FY22. Growth in revenues led by Chloro-vinyl, Fenesta, and Shriram Farm Solutions. Chloro-Vinyl revenues up 90% YoY at Rs. 1,042 crores primarily led by prices. Shriram Farm Solutions revenues up 13% YoY at Rs. 446 crores led by volumes. Fenesta revenues up 26% YoY at Rs. 137 crores driven by volumes and prices. Sugar revenues fell 14% YoY, at Rs. 565 crores primarily due to lower sugar volumes despite better prices, led by lower monthly releases.

Chemicals business revenues up 115% YoY at Rs. 738 crores driven by prices. ECU prices up 126% YoY, Flakes prices also up YoY, and ECU prices up 73% QoQ. Caustic sales volumes up 8% YoY, also contributed to the revenues. Sales volumes of Hydrogen and Aluminum Chloride were also up.

Vinyl business revenues rose 47% YoY at Rs. 304 crores driven by higher prices and higher volumes of Carbide. PVC prices up 36% YoY and carbide prices up 94% YoY. 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 crores resulting from higher gas prices which is a pass through.

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