BENGALURU (Reuters) – India’s DCM Shriram Ltd reported a 53.5% fall in its fourth-quarter profit on Tuesday, hurt by a rise in raw material and power costs.
The company’s consolidated net profit fell to 1.87 billion rupees ($22.8 million) compared to 4.01 billion rupees a year ago. Revenue from operations also fell marginally to 28.49 billion rupees.
Revenue in DCM’s chloro-vinyl arm, which accounted for the largest share of its total revenue for six quarters, declined 21% year-on-year, falling to second place behind the sugar segment.
According to the company, the chemical business was down due to fall in demand owing to global recessionary trends and new capacity additions in India.
DCM Chairman Ajay Shriram and Vice Chairman Vikram Shriram said in a joint statement that projects for chemical business will be “delayed by a quarter” due to supply constraints.
The vinyl business has been under pressure amid recession fears and weak demand from clients in the construction sector.
The company added that import of PVC continues to be high due to poor demand from construction sector in China, U.S. and Europe, with “matters of anti-dumping duty and reduction in customs duty unaddressed by the government.”
The sugar segment’s revenue rose 28.3% YoY to 10.68 billion rupees on account of higher sugar and distillery volumes, along with higher prices.
The chemicals-to-sugar maker had in January commissioned capacity expansions at its Ajbapur and Hariawan sugar units, and an expansion of its distillery at Ajabpur by 120 kilolitres per day.
The company’s total expenses rose 11.6% due to higher raw material and power costs.
DCM also said it had a one-time negative impact of 230 million rupees on account of provision for electricity duty on auxiliary consumption in Rajasthan.
The company declared a final dividend of 3.60 rupees per share for fiscal year 2023.
($1 = 81.8600 Indian rupees)
(Reporting by Ashish Chandra in Bengaluru; Editing by Varun H K)
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