💰 Financial Performance

Revenue Growth by Segment

Consolidated operating income grew 11% to INR 12,077 Cr in FY25. Segment-wise growth for FY25: Chemicals & Vinyl grew 24% due to Bharuch expansion; Shriram Farm Solutions (SFS) grew 21%; Bioseed grew 17%; Fenesta Building Systems grew 5%; and Sugar & Ethanol grew 4%. In Q2 FY26, Chemicals revenue rose 43% YoY to INR 1,108 Cr, while SFS rose 27% to INR 471 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company operates 12 locations across India and accesses both domestic and foreign capital markets.

Profitability Margins

Operating margin improved to 11% in FY25 from 9% in FY24, driven by higher volumes in Chemicals and SFS. Q1 FY26 operating margin remained steady at 9.3%. PAT for FY24 was INR 447.1 Cr (4.09% margin) and reached INR 425.4 Cr for 9M FY25 (4.6% margin).

EBITDA Margin

EBITDA margin (OPBDIT/OI) was 10.1% for 9M FY25 compared to 9.07% in FY24. The increase is attributed to capacity expansions and better realizations in the Chloro-Vinyl segment, which offset margin declines in the sugar segment.

Capital Expenditure

The company maintains a high capex profile, supported by annual cash accruals of over INR 900 Cr. Significant planned capex includes the acquisition of Hindusthan Speciality Chemicals Ltd (HSCL) to enter the epoxy and advanced materials market at Bharuch.

Credit Rating & Borrowing

CRISIL reaffirmed 'Crisil A1+' for the Commercial Paper program (enhanced to INR 700 Cr). Interest coverage ratio improved to 8.7x in FY25 from 11.3x in FY24 (per ICRA metrics). Total debt/OPBDIT stood at 2.10x in FY24.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Sugarcane (for sugar/ethanol), Salt (for Chlor-Alkali), Coal (for power generation), and various seeds/chemicals. Salt is a critical input, with market prices around INR 2,300 per ton.

Import Sources

Salt is sourced partly through a new acquisition (covering 13% of requirements) and the remainder from the open market. Specific geographic sources for other materials are not detailed, though operations are centered in India (e.g., Uttar Pradesh for sugar, Bharuch for chemicals).

Key Suppliers

Not disclosed in available documents, except for a strategic MoU with Bayer Crop Science Limited for agricultural inputs.

Capacity Expansion

Sugar crushing capacity is 42,400 tonnes of cane per day (TCD) across four mills. Distillery capacity is 560 KLD. Chemical capacity was recently expanded at the Bharuch plant. The HSCL acquisition will add epoxy, calcium chloride, and aluminium chloride facilities.

Raw Material Costs

Salt procurement costs are approximately INR 2,300 per ton; the company aims for a 30-40% margin on salt-related operations. Sugarcane availability issues and government-controlled pricing significantly impact the cost structure of the sugar and ethanol segments.

Manufacturing Efficiency

The company achieved a Lost Time Injury Frequency Rate (LTIFR) of nil in FY25. Manufacturing efficiency is supported by vertical integration, such as using sugar by-products for ethanol and power.

📈 Strategic Growth

Expected Growth Rate

13%

Growth Strategy

Growth is targeted through capacity expansion in Chemicals (Bharuch), the acquisition of HSCL for entry into epoxy/advanced materials, and expanding the Fenesta brand's product profile. The company is also leveraging a strategic MoU with Bayer Crop Science to advance sustainable agriculture.

Products & Services

Chlor-alkali (caustic soda), PVC, Urea, Sugar, Ethanol, Research Seeds (Bioseed), UPVC/Aluminum windows and doors (Fenesta), Cement, and value-added agri-inputs (SFS).

Brand Portfolio

Fenesta Building Systems, Shriram Farm Solutions, Bioseed.

New Products/Services

Expansion into Epoxy, Calcium Chloride, and Aluminium Chloride via the HSCL acquisition. Fenesta is diversifying into aluminum windows and facades to increase wallet share in building materials.

Market Expansion

Expansion of the Fenesta retail network and increasing the product profile in the SFS segment to maintain market leadership in research wheat.

Market Share & Ranking

Market leader in the research wheat segment (SFS) and a leading player in the organized UPVC windows market (Fenesta).

Strategic Alliances

Strategic MoU signed with Bayer Crop Science Limited in December 2025 to advance sustainable agriculture.

🌍 External Factors

Industry Trends

The industry is shifting toward sustainability and ethanol blending (20% target). DCM Shriram is positioning itself by increasing distillery capacity to 560 KLD and adopting 35% green energy to meet ESG expectations of foreign portfolio investors.

Competitive Landscape

Competes with diversified chemical and agri-business conglomerates; maintains edge through research-led seeds and a pan-India distribution network for SFS.

Competitive Moat

Moat is built on vertical integration (sugar-ethanol-power), cost leadership in Chlor-Alkali through scale, and strong brand equity in Fenesta. These are sustainable due to high capital entry barriers in chemicals and a 10x water harvesting surplus.

Macro Economic Sensitivity

Highly sensitive to government agricultural policies (MSP for crops, fertilizer subsidies) and sugar export/ethanol blending mandates.

Consumer Behavior

Increasing demand for premium building materials (Fenesta) and sustainable agri-inputs among the farming community.

Geopolitical Risks

Exposure to global commodity price volatility in the chemicals and plastics segments.

⚖️ Regulatory & Governance

Industry Regulations

Subject to government control on fertilizer input/output prices, sugar inventory limits, and ethanol blending feedstock restrictions (syrup vs grain).

Environmental Compliance

10x water harvested and conserved; 35% green energy usage. ESG profile supports credit risk, especially for chemical operations involving high water and waste.

Taxation Policy Impact

Tax outflow is currently equivalent to Minimum Alternate Tax (MAT).

Legal Contingencies

BSE Limited imposed a penalty of INR 30,000 for late submission of the XBRL Secretarial Compliance Report for FY24. No other major pending court case values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Regulatory changes in the sugar and fertilizer industries (high impact); volatility in Chlor-Alkali and plastic segment margins.

Geographic Concentration Risk

Sugar operations are concentrated in Uttar Pradesh (4 mills); Chemical operations are centered in Bharuch, Gujarat.

Third Party Dependencies

Dependent on the government for fertilizer subsidies and ethanol pricing; dependent on external salt markets for 87% of requirements.

Technology Obsolescence Risk

Mitigated by investments in new revenue platforms and capacity enhancements in the Chloro-Vinyl and Fenesta segments.

Credit & Counterparty Risk

Liquidity is strong with INR 986 Cr in cash and liquid investments as of March 31, 2025, mitigating counterparty risk.