A small Cap stock surged 2 percent after the company announced to invest Rs 1,000 crore in capital expenditure for the next few years, it has delivered a 23 percent return over one year.
With a market capitalization of Rs 15,646.47 crore, the stock price of DCM Shriram opened trading session at a higher note of Rs 988.90 a piece, which rose by 2 percent from its previous close of Rs 979.05 a piece to an intraday high of Rs 1027.15 a piece.
DCM Shriram announced its plans to invest in a chemical business (epoxy and value-added products) of Rs 1,000 crore for the next few years under the domain of advanced materials to set up a greenfield state-of-the-art epoxy manufacturing plant.
According to the company exchange filing, the epichlorohydrin (ECH) plant in Jhagadia, Gujarat, is in the final stages of completion and is expected to be commissioned by 2024–2025. More than 80% of the globally produced epichlorohydrin (ECH) is used in the manufacturing of epoxy.
According to the recent investor presentation, the company has given a segment wise revenue of Rs 3,035 crores in Q3 FY24, including Rs 663 crore from Chloro-Vinyl, followed by Rs 891 crore from sugar, Rs 214 crore from fenesta, Rs 596 crore from SFS, Rs 418 crore from fertiliser, Rs 138 crore from bioseed, and Rs 148 crore from others.
The promoter of the company holds 66.52 percent of the stakes, followed by 22.69 percent by the public, 7.93 percent by foreign institutional investors, and the remaining 2.86 percent by domestic institutional investors.
Looking at the key financial indicators, the company has delivered a return on equity of 9.92 percent and a return on capital employed of 12.83 percent during the twelve trailing months (TTM).
DCM Shriram is a diversified Indian conglomerate, founded in 1989, engaged in the Agri rural business and Chloro-Vinyl business. The company is also present in businesses like bioseed, vinyl, PVC compounding, urea, and cement. These businesses will have reasonable growth based on opportunities and continue to offer reasonable returns.
Written By Praveen R
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