share market
DCM Shriram’s shares really did wonders in the stock market on Wednesday. As soon as the market opened in the morning, there was a race among investors to buy shares of this company. The situation was such that within no time the stock jumped by almost 13 percent and reached the highest level of Rs 1,186.50 on BSE. Around 9:15 in the morning, this stock was trading 8.3 percent higher, which left behind the rise of Sensex. It is natural for a common investor to wonder what happened overnight? The simple answer is – the company’s quarterly results were much better than expected. The company’s profit has increased more than six times, which has attracted the full attention of the market.
The real mathematics behind profits
Everyone is surprised to see the figures for the first quarter (April-June) of the financial year 2027. This time the company has made a huge net profit of Rs 693 crore. If we talk about the same time last year, the company had earned only Rs 113 crore. But this is not the whole story. There is a special reason hidden behind this huge profit.
In fact, apart from its regular business, the company has made a one-time profit of Rs 79.42 crore. The company sold half the stake of one of its subsidiary companies (‘Technor Apex B.V.’), from which it got about Rs 12 crore. Along with this, about Rs 68 crore was also raised by selling a vacant land lying in Mokila village (which was related to bioseed business). Both these deals together have made the balance sheet of the company very strong.
Chemical and Fenesta business gained momentum
Even if we keep aside the money received from land and stake, the company’s core business is also in very good condition. Talking about total revenue, it has increased by 9.3 percent on annual basis to Rs 3,565 crore, which was Rs 3,262 crore last year.
The chemical sector has played the biggest role in boosting this earnings, which has registered an impressive growth of 33 percent. Apart from this, their famous brand ‘Fenesta Building Systems’, which manufactures doors and windows for homes, has also grown by 22 percent. The company’s operating profit (EBITDA) has reached Rs 336 crore and its margin has improved to 9.4 percent. This clearly shows that the day-to-day business of the company is going in the right direction.
Company’s future planning amid global tension
Nowadays markets around the world are facing many difficulties. Due to the ongoing tension in West Asia, the supply chain has been greatly affected and due to rising energy prices, there is a fear of inflation rising again. The company’s management, including Ajay Sriram (Chairman) and Vikram Sriram (Vice Chairman), have openly acknowledged these challenges.
He also says that this time the onset of monsoon in India was a bit bad, which has affected the demand in rural areas. However, despite all these difficulties, his faith remains intact on India’s industrial development. The management’s focus is now on launching its new capacity as soon as possible and investing the money in the right place. Their balance sheet is so strong that they can easily deal with this economic turmoil happening around the world and can grow their business safely.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsh advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
