DCM Shriram Limited delivered a resilient performance in the first quarter of FY27 despite geopolitical tensions, volatile commodity prices, and an uneven monsoon. During its Q1 FY27 earnings call, the management highlighted strong growth in the chemicals business, improving profitability across several segments, and confidence in India’s long-term growth prospects.

The company also shared updates on renewable energy investments, expansion of its specialty chemicals portfolio, and progress on its long-awaited business demerger.

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Q1 FY27 Financial Highlights

DCM Shriram reported healthy growth in revenue and operating profit despite facing challenges across agriculture and global supply chains.

The reported PAT included:

• ₹474 crore one-time tax adjustment related to earlier years
• ₹79 crore gain from surplus land sale and stake sale in a polymer compounding joint venture

Excluding these exceptional items, the company’s core earnings remained strong.

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Chemicals Business Continues to Drive Growth

The Chemicals division remained the biggest contributor during the quarter.

Key Highlights

• Revenue increased 33% YoY
• PBDIT rose 24% YoY to ₹274 crore
• Caustic soda prices improved with ECU realizations rising around 7%
• Advanced Materials portfolio (Glycerine → Epichlorohydrin → Epoxy) contributed significantly to growth

Management noted that:

• Epichlorohydrin and Epoxy plants are operating at nearly 70% utilization
• Hydrogen Peroxide plant is operating around 85% utilization
• New Aluminium Chloride and Calcium Chloride projects are expected to commence commercial production during Q2 FY27

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Bharuch Plant Earns Global Recognition

One of the biggest achievements during the quarter was DCM Shriram’s Bharuch Chemicals Complex receiving World Economic Forum Lighthouse Recognition.

The company said this recognition reflects its successful adoption of digital technologies and smart manufacturing practices.

Only a handful of chemical companies globally have received this recognition.

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Renewable Energy Expansion to Reduce Costs

The company continues investing heavily in renewable energy.

During Q1, DCM Shriram signed an agreement with Serentica Renewables to source:

• 58 MW peak hybrid renewable energy for Bharuch

After commissioning:

• Total renewable capacity across Bharuch and Kota will reach around 176 MW

Management believes this will improve:

• Energy security
• Long-term operating costs
• Sustainability
• Carbon footprint reduction

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Vinyl Business Faces Temporary Pressure

The Vinyl business witnessed mixed performance.

Positives

• Plant utilization remained at 100%
• PBDIT increased 88% YoY
• Higher PVC prices supported profitability

Challenges

Domestic PVC demand remained weak because of:

• Labour shortages
• Heatwave
• Higher imports from China
• Temporary customs duty changes

However, management expects recent government measures like:

• Restoration of Basic Customs Duty
• Minimum Import Price (MIP)

to support domestic PVC producers going forward.

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Sugar & Ethanol Outlook Remains Positive

Management expects global sugar markets to move into deficit during the 2026-27 season.

India is expected to maintain relatively healthy sugar stocks while sugar prices remain firm.

Key management observations:

• Sugar prices around ₹4,450/quintal expected to stay firm
• Government preparing for ethanol blending beyond E20
• Better policy clarity on ethanol pricing will support industry growth

The company also said it will continue optimizing grain-based ethanol production depending on profitability.

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Fenesta Continues Strong Growth

Fenesta Building Systems maintained healthy momentum.

Q1 Performance

• Revenue increased 22%
• PBDIT grew 13%
• Healthy project pipeline
• Order book remains around ₹1,000 crore

The company is also expanding into:

• Wooden doors
• New building material categories

Management believes Fenesta remains a long-term growth engine.

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Agriculture Business Faces Monsoon Challenges

The delayed monsoon impacted agriculture-related businesses.

Shriram Farm Solutions

Despite difficult conditions:

• Revenue increased 2%
• PBDIT rose 22%

Growth was driven by:

• Better product mix
• New products
• Strong farmer relationships
• Improved margins

Management emphasized that R&D remains a key long-term competitive advantage.

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Bioseed Business Under Pressure

Bioseed was one of the weakest performing businesses.

Revenue declined 26% because:

• Delayed rainfall reduced sowing
• Lower demand for corn and paddy seeds
• Higher inventory after strong previous production season

Management acknowledged that much of the Kharif season demand has already been lost due to delayed sowing.

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Fertilizer Business

Revenue increased 11% while margins moderated.

Higher global natural gas prices increased input costs.

However, management appreciated the Government’s timely fertilizer subsidy payments, which helped maintain liquidity.

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Management Remains Bullish on India’s Growth Story

Chairman Ajay Shriram expressed confidence despite global uncertainties.

According to management:

• Urban demand remains healthy
• Government infrastructure spending continues
• India’s long-term growth remains intact

The company plans to continue investing in:

• Specialty chemicals
• Value-added products
• Digital manufacturing
• Renewable energy
• Strategic acquisitions

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Demerger Plans Still On Track

Investors also asked about the previously announced demerger.

Management confirmed:

• The company remains committed to restructuring its businesses.
• Internal work is progressing actively.
• The application process is expected to begin during the current financial year, although no specific completion timeline was provided.