Accumulate DCM Shriram; target of Rs 229: Emkay

Emkay's research report on DCM Shriram

Consolidated revenues at Rs 12bn was down 18%yoy, marginally lower than our estimates due to lower than estimated revenues from seed and sugar business

Consolidated EBITDA at Rs 383mn was down 61%yoy and lower than our estimates due to write off in the international seed business and higher than expected inventory valuation loss for the sugar business. EBITDA margins thus contracted by ~360bps and stood at 3.2%

Given the sharp fall in caustic soda & PVC prices, lower average sugar realizations and losses in the international seed business, we have revised our FY15E/16E lower by 14%/18% respectively. We have rolled forward our SoTP based valuation to FY16E while reducing our target price to Rs 229; maintain Accumulate", says Emkay Global Financial Services research report.

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