The Indian economy ended the financial year 2023-24 with GDP growth surpassing market
expectations, despite strong external headwinds. Early indications suggest a continuation
of the economic momentum during the first quarter of FY25. Some of the high frequency
indicators of growth such as GST collections, toll receipts on highways, sale of vehicles,
electricity consumption, passenger traffic both rail and air, value of digital
transactions, corroborate to the growing strength of the economy. The country was able to
generate and distribute adequate power on account of increased industrial activity and
higher temperatures, with peak loads exceeding 250 GW, which is a new record. Industrial
activity is gaining momentum as can be seen from the improving industrial capacity
utilization and volume indicators like the Index of Industrial Production. Concurrently,
fixed investment is gathering pace with Government's focus on capital spending and the
resultant ripple effect on private investment. Bank and Corporate Balance Sheets reflect a
healthy financial stability along with significantly improved performance by the Public
Sector Units. The forward-looking surveys of the Reserve Bank also indicate improving
consumer confidence and industrial outlook.
Retail inflation at 4.8 per cent in April 2024 was the lowest in the past 11 months.
The positive outlook of a normal monsoon season is reassuring, particularly in light of
last year's deficit and the low water levels in various reservoirs of across the country.
This should help in keeping inflation under check. On the external front, despite global
challenges, India's foreign exchange reserves are comfortable, and the Indian rupee has
been stable vis-?-vis the US dollar. Exports, particularly on account of growth in
service exports has ensured stability for the country's balance of payments. Thus, the
major pillars of India's macro-economic strength are positive and should help navigate
unforeseen difficulties. However unrelenting geopolitical tensions and volatility in
global commodity prices, especially of petroleum products, and the risk of commodity
dumping, present some of the uncertainties that the economy may encounter. During the
financial year 2023-24, the Company's total revenue from operations (net of excise duty)
was Rs 10922 Crores vs. Rs. 11547 Crores last year. This was essentially on account of
lower product prices and lower volumes of the Chloro-Vinyl business. Sugar and Ethanol
business revenue increased by 24%, both on account of volumes and unit product prices.
Fenesta Building Systems registered a growth of 18% led by volumes, Shriram Farm Solutions
business achieved a 15% growth and Bioseed business revenue grew by 14%. Fertilizer
business revenues declined by 24% on account of lower gas prices which is a pass through.
Profit before depreciation, interest and tax was Rs.1089 Crores, down 37% over last
year. The decline was on account of 82% lower PBDIT of Chloro-Vinyl, primarily due to
global reduction in commodity prices. Although costs have declined, including energy
costs, but it was not commensurate with decline in product prices, leading to pressure on
margins. Other three major businesses recorded an increase in PBDIT driven by higher
volumes, improved product prices and better margins. Sugar and Ethanol PBDIT was up by
64%, Shriram Farm Solutions up by 21% and Fenesta Building Systems up by 20%. Bioseed
PBDIT improved significantly driven by higher volumes specially for India business.
Fertiliser business recorded a decline of 53% in PBDIT led by reduction in energy norms
and lower gas prices. Cement business also registered an improvement in PBDIT. Overall
PBDIT margins declined to 10% from 15% last year.
Net Profit for financial year 2023-24 was Rs. 447 Crores, lower by 51% from Rs.911
Crores in the previous year. Net Debt as on 31st March 2024 increased to Rs.1,434 Crores
vis-?-vis Rs.681 Crores as on 31st March 2023, as surplus funds were utilized for
expansion projects.
During the year 2023-24, some of the significant projects commissioned were, a 44 MW
(peak) renewable power facility at our Chemicals Complex in Bharuch and a 4600 TPA
manufacturing facility of Sulphate of Potash plant at Hariawan Sugar complex. Fenesta
expanded its uPVC extrusion plant at Kota. Under the Fenesta brand, the business entered a
new product line of Facades, for which a fabrication plant was established in Hyderabad.
Farm Solution Business started commercial production of specialty crop nutrition products
and biologicals from its own manufacturing facility at Kota The current year 2024-25 will
see major capacity expansion as well as new product additions at Bharuch Chemical complex.
This includes a 850 TPD caustic soda plant, 600 TPD Caustic soda Flaker facility, 56100
TPA Hydrogen Peroxide facility and a 52,000 TPA Epichlorohydrine (ECH) plant supported by
120 MW captive power plant. In the Sugar business a 12 TPD Integrated Compressed Biogas
Project at Ajbapur complex is expected to be completed by Q4 FY'25 and a 2100 TCD crushing
capacity expansion at Loni complex will be commissioned by Q3 FY'25.
During the year the company continued to work towards integrating environmental, social
and governance (ESG) principles into all our operations across the value chain. A policy
on Biodiversity was adopted to reiterate our commitment towards preventing loss of natural
habitat. The Company participated in the Dow Jones Sustainability Index (DJSI), and was
ranked amongst the top 8% most sustainable companies out of 527+ global chemical
companies. As part of a long-term mitigation plan, initiatives are being taken to reduce
the withdrawal of groundwater and increasing ground-water recharge. As a result, the
company's water harvesting and conservation measures resulted in making DCM Shriram a 12
times water positive company. During the year the Company has tied up sustainability
linked loans amounting to Rs. 300 Crs, demonstrating our commitment towards the
environment.
DCM Shriram Foundation the company's philanthropic arm is committed to playing a larger
role in bringing a tangible difference in the lives of the communities around our
manufacturing locations through holistic development. We continue our focus on healthcare,
education, livelihood, sanitation and environment. By addressing multiple needs, the
impact is visible with long term benefits. The Foundation also aims to play a catalytic
role in creating a more enabling ecosystem for enhancing sustainable use of water in
agriculture in India, in close partnership with other stakeholders. Towards this end we
launched the DCM Shriram AgWater Challenge with our partner The Nudge /Prize with the
primary goal to foster innovation in the agriculture-water space. The AgWater Challenge
seeks to inspire AgTech entrepreneurs and social impact innovators to develop scalable
solutions within India's agricultural water ecosystem. We have also partnered with Sattva
Knowledge Institute for a report on "Transforming Crop Cultivation by Advancing Water
Efficiency in Agriculture”. Our employees are our biggest strength and we recognise
their commitment towards the growth of the company. They are encouraged to innovate and
constantly learn, in order to keep abreast with global best practices. The wide range of
exposure covers Information technology to process engineering and from business strategies
to human productivity. Employees across functions and levels get an opportunity to attend
training programmes at leading management institutes such as IIMs and Wharton Business
School. One such initiative for our senior team is the Advanced Leadership Development
Program in collaboration with Indian School of Business (ISB) and the National University
of Singapore (NUS).
We would like to take this opportunity to thank all our stakeholders members of the
board, business associates, employees, suppliers, government authorities, lenders and
shareholders who have contributed to the growth of our company. With their cooperation, we
are confident of maintaining the growth momentum in the coming years.
7th June 2024
With best wishes,