DCMSHRIRAM Q2 FY27 Results Analysis: PAT Falls 33%, Net Debt Down Rs. 1,003 Crore

DCMSHRIRAM's Q2 FY27 numbers came in soft, with revenue of Rs. 4,150.79 Cr (+20.93% YoY) and PAT growth of -33.42% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

DCM Shriram delivered 20.93% YoY revenue growth led by Chemicals & Vinyl (+42.25%) and Fertiliser (+40.41%), but PAT fell 33.42% to Rs.105.68 crore as ex-other-income EBITDA margin compressed 212 bps to 7.33% on energy costs and ramp-up of newly commissioned plants. The balance sheet is the standout: net debt fell Rs.1,003 crore in H1 to Rs.892.25 crore (0.54x TTM EBIDTA), exceeding the full-year ~Rs.200 crore reduction target. Key watch items are Chemicals & Vinyl margin recovery as new AlCl3/CaCl2 lines ramp and whether PVC import protection translates into margin support.

Key Investment Insights

Key Positives

• Revenue grew 20.93% YoY to Rs.4,150.79 crore; net revenue ex-excise +21.54% YoY
• Chemicals & Vinyl revenue +42.25% YoY, Fertiliser +40.41%, Fenesta +21.59%
• Sugar & Ethanol segment result improved to Rs.30.04 crore from Rs.2.28 crore YoY
• Net debt fell Rs.1,003.17 crore in H1 to Rs.892.25 crore; net debt/TTM EBIDTA at 0.54x vs 1.15x at Mar-26
• H1 free cash flow of Rs.644.31 crore; CFO/PAT of 1.24x
• AlCl3 (100 TPD) and CaCl2 line 1 (133 TPD) commissioned at Jhagadia on 30 Sep 2026; Kota 15,000 MT extrusion plant commissioned 1 Sep 2026
• Finance costs fell 17.67% YoY to Rs.35.46 crore on deleveraging
• Interim dividend of Rs.4.00/share declared, aggregating Rs.62.38 crore

Risk Factors

• PAT after JV share fell 33.42% YoY to Rs.105.68 crore despite 20.93% revenue growth
• Ex-other-income EBITDA margin compressed 212 bps YoY to 7.33% from 9.45%
• Chemicals & Vinyl segment margin halved to 8.48% from 18.11% YoY with result down 33.40%
• Power and fuel costs rose 30.58% YoY and 18.83% QoQ amid tight September power/coal conditions
• Bioseed loss widened to Rs.42.98 crore from Rs.8.66 crore YoY on revenue decline of 14.85%
• Shriram Farm Solutions revenue fell 10.18% YoY with result down 27.10%