DCM Shriram Q4 FY25 Earnings Analysis

- Chemicals volumes expected to increase as capacity ramp-up nears completion after capital expenditure phase. - Caustic Soda volumes up 21% due to new 850 TPD facility; further growth expected with increasing utilization. - Vinyl demand anticipated to grow by approximately 10% driven by agriculture and construction activities. - Epichlorohydrin (ECH) plant commissioning and new Aluminum Chloride and Calcium Chloride projects to boost volume and utilization in next 12-18 months. - Shriram Farm Solutions expects continued growth driven by robust demand for Rabi crops and increasing farmer adoption; research wheat market growing ~15%. - Bioseed segment on promising growth path due to new hybrids and increased acreage in corn and paddy. - Fenesta Building Systems expanding product portfolio and market penetration with new hardware business entry. - Sugar and ethanol volumes stable with government support and new projects like the Compressed Bio Gas plant. - Overall expectation of revenue and volume growth as new projects commission and market conditions improve.

- Chemicals business is expected to improve as caustic soda volumes increase and capital expenditure plans near completion, leading to better cost structures and higher volumes. (Page 14) - Hydrogen peroxide plant utilization and positive contribution are expected to improve further in Q4. (Page 15) - Vinyl business margins are reasonable with potential stability; commissioning of 68 MW Green Energy plant by end of next year will improve cost structure and sustainability. (Page 13) - Bioseed segment is on a turnaround path with growth driven by volumes and prices, with strong domestic and international contributions. (Page 7) - Fenesta margins currently under pressure due to fixed costs but expected to stabilize as capacity ramps up. (Page 17) - Overall volumes expected to increase with capex completion, aiding profitability improvement despite external cost pressures. (Page 14) - Return on capital employed expected to improve as new assets ramp up utilization. (Page 14)

- Rs. 1000 crore investment approved by the board in advanced materials, largely in epoxy space; land acquired and technical discussions ongoing for ~80,000 tons per annum capacity (Page 16). - Aluminum extrusion facility project (~Rs. 150 crore) progressing as per schedule to bolster aluminum windows business by controlling quality and customer service (Page 10). - Rs. 65 crore investment planned for hardware manufacturing (Page 10). - Around Rs. 700 crore CAPEX guidance for FY26, including aluminum chloride, calcium chloride, extrusion, 74 MW green energy, infrastructure at Bharuch (water reservoir), and turbine investment (~Rs. 50-60 crore) for cost improvement (Page 16). - Additional green power addition of 6.6 MW expected by end of this financial year and ongoing efforts to optimize energy cost with renewable capacity expansion of about 74 MW over 15 months (Pages 9, 3).

- The company mentioned that they will announce a fundraise but no specific details were provided yet. - As per the Q&A (Page 12), Aditya Shriram stated they are continuously evaluating new opportunities and adjacencies for the chemicals business and others. - Any new fundraising or expansions will be announced once the board approves. - No explicit mention of immediate or ongoing debt or equity fundraising was made in the transcript. - Net debt was reported at Rs. 867 crore as of December 31, 2024 (Page 7), indicating current leverage levels. - Capital expenditure projects are nearing completion, which may reduce immediate funding needs, but future projects like advanced materials and hardware business expansion may require financing. In summary, fundraising is planned or under evaluation but no concrete or immediate debt/equity issuance details are disclosed.

- Fenesta Building Systems has a healthy order book with a 33% growth. - Despite strong order book growth, this has not yet translated into revenue growth. - Capital employed for Fenesta is only Rs. 45 crore for about Rs. 120 crore of PBT per annum, indicating efficient use of capital. - Execution of orders is slow due to slow growth and liquidity issues in the building materials market.