Synopsis: A leading diversified company, DCM Shriram, has taken another major step to lower energy costs and accelerate its sustainability roadmap. Beyond the investment itself, the move is expected to strengthen long-term power security, improve cost efficiency, and significantly expand the company’s renewable energy footprint.
Renewable energy is increasingly becoming a strategic business decision rather than just an environmental initiative. For energy-intensive manufacturers, securing long-term green power can reduce operating costs, improve earnings visibility, and lower dependence on conventional energy sources. Reflecting this trend, DCM Shriram Ltd. has signed a definitive agreement with Serentica Renewables India 38 Private Limited to source additional renewable energy for its Bharuch manufacturing facility.
Shares of DCM Shriram Limited were trading at Rs 1,027, up by 0.43 percent from the previous close of Rs 1,022.9. The stock opened at Rs 1,027, touching an intraday high of Rs 1,030 and a low of Rs 1,015.7. The company currently has a market capitalisation of Rs 16,037 crore.
Renewable Energy Agreement
DCM Shriram has entered into a definitive agreement with Serentica Renewables India 38 Private Limited to develop a 58 MW (peak) hybrid renewable energy project dedicated primarily to its Bharuch chemicals facility in Gujarat.
Under the agreement, the company will invest up to Rs 104.4 crore (approximately Rs 105 crore) in one or more tranches to acquire and maintain a 26 percent equity stake in the special purpose vehicle, in line with India’s group captive generation requirements under the Electricity Act. The transaction is expected to be completed by 30 June 2027, with the project also expected to be commissioned by the same timeline.
The renewable energy project will provide approximately 58 MW of renewable power, including nearly 36 MW of round-the-clock (RTC) power, ensuring reliable electricity for the company’s energy-intensive chemical operations. Upon commissioning, DCM Shriram’s total renewable power capacity across its Bharuch and Kota manufacturing facilities will increase to 176 MW (peak), significantly strengthening its clean energy portfolio.
Lower Power Costs
According to Sabaleel Nandy, Executive Director & CEO of DCM Shriram Chemicals, the project is a strategic step towards increasing the share of renewable energy in the company’s chemical operations.
Besides advancing sustainability goals, the initiative is expected to avoid nearly 0.4 million tonnes of CO₂ emissions annually while improving the share of renewable electricity in the company’s energy mix.
Management also highlighted that electricity remains one of the largest input costs for the chemicals business. By securing renewable power through the captive model, the company expects to improve cost efficiency, gain better visibility over long-term power expenses, and reduce exposure to fluctuations in conventional energy prices. These factors could enhance operational efficiency and provide greater predictability in manufacturing costs over the long term.
190 MW Renewable Energy Project
The renewable power will be supplied through Serentica’s 190 MW hybrid renewable energy project, combining solar power from Rajasthan and wind power from Karnataka to ensure a reliable supply of green electricity to DCM Shriram’s Bharuch facility.
Serentica Renewables stated that the partnership supports India’s industrial decarbonisation journey by providing dependable renewable energy to one of the country’s leading chemical manufacturers.
The renewable energy developer currently has 3,000 MW of renewable energy capacity and is backed by KKR’s $650 million investment. It aims to supply over 50 billion units of clean energy annually through a diversified portfolio of solar, wind, storage, and balancing solutions.
Financial Highlights
The company reported a mixed performance in FY26, with revenue increasing 11.2 percent YoY to Rs 3,193 crore in Q4 FY26 from Rs 2,877 crore in Q4 FY25. However, operating profit declined 12.8 percent YoY to Rs 353 crore from Rs 405 crore, while the operating margin contracted to 11 percent from 14 percent, indicating pressure on operating profitability.
Despite the weaker operating performance, net profit surged 107.3 percent YoY to Rs 371 crore from Rs 179 crore, supported by a tax write-back (effective tax rate of -46 percent) and higher other income. EPS also increased sharply to Rs 23.72 from Rs 11.47 during the same period.
The company maintained a healthy balance sheet with ROCE and ROE of 11.8 percent, a debt-to-equity ratio of 0.38, and a current ratio of 1.49. It also held cash and cash equivalents of Rs 854 crore and offered a dividend yield of 1.10 percent.
Over the long term, the company has delivered a 5-year sales CAGR of 10 percent, while 3-year sales growth stands at 5 percent. However, profit growth has remained subdued, with a 5-year CAGR of 6 percent and a marginal decline of 1 percent over the last three years, reflecting inconsistent earnings growth.
Building Long-Term Energy Security
The agreement represents more than a renewable power sourcing arrangement. By acquiring a 26 percent stake in the special purpose vehicle under the group captive framework, DCM Shriram is securing long-term access to renewable electricity while maintaining greater control over its future energy requirements.
This strategy reduces reliance on conventional power procurement and strengthens the resilience of its manufacturing operations.
With the project expected to become operational by June 2027, the company’s renewable energy capacity across Bharuch and Kota will reach 176 MW (peak). Alongside lowering carbon emissions, the investment is expected to improve cost competitiveness, strengthen energy security, and support DCM Shriram’s broader strategy of building a more sustainable and efficient manufacturing business.
DCM Shriram Limited is a diversified business conglomerate with operations across chemicals, agri-rural products, sugar, power, cement, and Fenesta building systems. Its chemicals business is India’s second-largest chlor-alkali manufacturer, serving industries such as pharmaceuticals, textiles, water treatment, and industrial chemicals while focusing on technology-led, sustainable manufacturing.
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