DCM Shriram shares rose 13 percent after strong quarterly results. Net profit rose to ₹693 crore from ₹113 crore. Strength in its chemicals and Fenesta businesses, along with gains from asset sales, contributed to the strong earnings.
DCM Shriram shares made investors rich on Wednesday in the stock market. The company’s shares saw a massive jump of up to 13 percent. As soon as the market opened in the morning, there was a rush among investors to buy the company’s shares. Within no time, the stock reached a high of Rs 1186.50 on the BSE. Around 9:15 am, the stock was trading 8.3 percent higher, surpassing the Sensex’s gain. The main reason behind this rise is the company’s better-than-expected quarterly results, in which profits have increased by more than six times.
Historic six-fold increase in profits
The figures for the first quarter of fiscal year 2027, from April to June, were quite surprising. The company reported a net profit of ₹693 crore (approximately $1.13 billion). For the same period last year, the company had earned a profit of only ₹113 crore (approximately $1.13 billion). However, this profit is driven not only by business performance but also by significant financial transactions. As part of its strategic plan, the company has sold some assets, which is directly impacting its net profit.
Lump sum gain from property sale
In addition to its regular business, the company reported a one-time gain of ₹794.2 million. It sold half of its stake in V., earning approximately ₹120 million. Additionally, it sold vacant land in Mokila village, which was part of its bioseed business. The sale of this land generated approximately ₹680 million. These two major transactions have significantly strengthened the company’s balance sheet and pushed its profitability to new heights.
Chemical and Fenesta businesses performed well
Even after excluding proceeds from asset sales, the company’s core business appears to be in excellent shape. The company’s total revenue increased 9.3 percent year-on-year to ₹3,565 crore (approximately $1.8 billion), compared to ₹3,262 crore (approximately $3.26 billion) last year. The chemical sector contributed the most to this growth, registering a robust 33 percent growth. Fenesta Building Systems, a renowned brand that manufactures doors and windows for homes, also saw growth of 22 percent. Operating profit, or EBITDA, was ₹336 crore (approximately $1.8 billion), and margins improved to 9.4 percent.
Global challenges and future strategies
Global markets are currently facing a number of challenges, with ongoing tensions in West Asia disrupting supply chains and volatility in energy prices posing a risk of inflation. Company Chairman Ajay Shriram and Vice Chairman Vikram Shriram acknowledged these challenges and noted that the monsoon season in India has not started as expected, impacting rural demand. However, despite these challenges, management remains confident in India’s industrial growth. The company’s focus is now on rapidly commissioning new production capacity and making appropriate investments to maintain this growth momentum in the future.
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