Dismal monsoon a cause for concern: DCM Shriram

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Dismal monsoon a cause for concern: DCM Shriram

Ajay Sharma, Chairman & senior Managerial director of DCM Shriram Consolidated Ltd declares its Q1FY10 numbers. Its net profits stood at Rs 21.2 crore and net sales at Rs 893 crores.

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DCM Shriram Consolidated declared its Q1FY10  results today. The company's net profit stood at Rs 21.2 crore and net sales at Rs 893 crore.

Speaking about DCM's future plans Ajay Shriram, Chairman and Senior Managerial director of DCM Shriram Consolidated said that the dimal monsoons was a cause of apprehension its agricultural business. "The one area where we are putting a lot of effort is on our cane development, because sugar products are a large leg of our business."

Here is a verbatim transcript of the exclusive interview with Ajay Sharma on CNBC-TV18. Also watch the accompanying video.

Q: Could you take us through your earnings?

A: Our revenue growth in this quarter as compared to the last quarter has been about 12.5% on an overall basis. One of the businesses that has been low is our fertilizer business but that is basically because we had a change in our feedstock. Earlier on we used to use naphtha, which is almost twice the price of LNG, which is what we are using now. But otherwise, overall in our businesses, our revenue growth has been 12.5%.

Q: Could you take us through the segmental revenues: sugar, textiles, shipping containers etc? Could you take us through the major contributors to your revenues?

A: On the revenue side, if you look at our cement business, our cement business revenues are higher by about 27-28%. If you look at our agriculture businesses, which include sugar, that is up by about 90%. Fertilizer is down  because of the issue of change of feedstock. Agriculture inputs are up about 43%. So, totally our agriculture business revenues are up by about 17-18%.The other business, which includes Fenesta and our ESCO division, which is up by about 20%. Similarly, our Hariyali Kisaan Bazaar business, which is our chain of rural retail shops, has revenues up by about 25% on a QoQ basis.

Q: At this point, are you looking at kind of splitting these businesses because from an outsider investor perspective, you are pretty diversified? Do you plan to raise any money, if you are going to separate them?

A: Our policy has been that frankly we use the main company where we nurture the businesses; we grow the businesses, get them into a self-sustaining basis and as we have said before that in our Hariyali Kisaan Bazaar business, we do plan down the road to branch it out as a separate entity. I think maybe in the next year or so we will make it into a 100% subsidiary and then thereafter we will move it out. Our mind is open. We have not taken any firm view as yet. We already have a 100% subsidiary in Hybrid Seeds business. So, even that as well down the line, we do want to try to take it to the market. We have other businesses, which can. But we will look at that at the appropriate time.

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