Shares of a small-cap fertilizer stock shed 7 percent on Tuesday’s early trades to reach an intraday low of ₹ 840.05 apiece on the National Stock Exchange (NSE). This happened after the company announced its result for the first quarter of the financial year 2023-24.
According to an exchange filing, DCM Shriram’s profit after tax for the April to June quarter (Q1FY24) came in at 56.58 crores, which is 77.72 percent lower than its profit after tax of ₹ 253.96 crores reported in the corresponding quarter of the previous year. Its revenue fell marginally to ₹ 2,924.96 crores in Q1FY24, as compared to ₹ 2,961.63 crores in the corresponding quarter of the previous year.
DCM Shriram is engaged in the business of fertilizer, sugar and caustic soda. The company’s business segments include Fertilizers, Chloro-Vinyl, Shriram Farm Solutions, Sugar, Bioseed and others.
Commenting on the performance of the company in the latest quarter, in a joint statement, Mr. Ajay Shriram, Chairman & Senior Managing Director, and Mr. Vikram Shriram, Vice Chairman & Managing Director, said, “Our Chemicals and Vinyl businesses are facing challenges as a result of global disruptions in demand, supply and costs. We are taking measures in terms of scale, costs and integration that will help us weather these tough times.
With a market capitalization of ₹ 13,963 crores, DCM Shriram is a small-cap company. It has an ideal return on equity of 15.58 percent and an ideal debt-to-equity ratio of 0.28. Its shares were trading at a price-to-earnings ratio (P/E) of 15.48, which is lower than the industry P/E of 17.31, indicating that the stock might be undervalued as compared to its peers.
The company’s promoters hold a 66.52 percent stake in it, followed by retail investors with 23.02 percent, domestic institutions with 7.36 percent, foreign institutions with 2.58 percent and mutual funds with 0.52 percent.
Written by Simran Bafna
