DCM Shriram Limited

Ajay Shriram

- Chairman and Senior Managing

Vikram Shriram

- Vice Chairman & Managing Director; Mr. Ajit

K.K. Kaul

Whole-time Director; and Mr.

Ajay Shriram And Mr. Vikram Shriram. Members Of The Audience Will Get An Opportunity To Pose Their Queries To The Management Following These Comments During The Interactive Question

and-answer session.

60%

mpany, was much lower than our peers. And we will increase our refined sugar production to roughly 60% of capacity. And we do hope to get a premium of between 70 paise to 80 paise per kilo on the refin

Rs. 110

then current quarter it was close to 128 - 130. What we see as of now is the prices are almost at Rs. 110 or may maybe below that. So, how is your outlook on the PVC demand dynamics in this country and

10%

duty on imports from China was removed. And then in May the customs duty was reduced further from 10% to 7.5%. But in the last 2 weeks or so beginning of July, we have seen some very sharp declines in

7.5%

imports from China was removed. And then in May the customs duty was reduced further from 10% to 7.5%. But in the last 2 weeks or so beginning of July, we have seen some very sharp declines in the pri

Rs. 3,300 crore

he consumptions are still holding. Last bit on the CAPEX front. We have increased our CAPEX from Rs. 3,300 crore to Rs. 3,500 crore. Now it is basically a request, if you can help us break down our CAPEX produc

Rs. 3,500 crore

still holding. Last bit on the CAPEX front. We have increased our CAPEX from Rs. 3,300 crore to Rs. 3,500 crore. Now it is basically a request, if you can help us break down our CAPEX product wise and segment w

Rs. 47 crore

rimarily because there were more Capex added like for Fenesta extrusion plant, which will be about Rs. 47 crore. So, I am just explaining Rs. 3,300 crore to Rs. 3,500 crore first, right? So, there are some Cape

Rs. 2,800 crore

ed which led to this increase. But otherwise, broadly in chemicals, we're investing close to about Rs. 2,800 crore to Rs. 2,900 crore. In sugar, we're investing close to about Rs. 550 crore and the rest. And in ch

Rs. 2,900 crore

s increase. But otherwise, broadly in chemicals, we're investing close to about Rs. 2,800 crore to Rs. 2,900 crore. In sugar, we're investing close to about Rs. 550 crore and the rest. And in chemicals, the larger

Rs. 550 crore

esting close to about Rs. 2,800 crore to Rs. 2,900 crore. In sugar, we're investing close to about Rs. 550 crore and the rest. And in chemicals, the larger projects that we have is one is the captive power plant

120 megawatt

est. And in chemicals, the larger projects that we have is one is the captive power plant which is 120 megawatt. And then there is caustic capacity which is 850 TPD along with a 600 TPD flaker. Then we have ep

15%

nd then the refining capacity. So, today out of my total crush, whatever sugar I manufacture about 15% is refined which will move up to about 60% post these CAPEX investments and we also have a potash

“And we do hope to get a premium of between 70 paise to 80 paise per kilo on the refined sugar vis-à-vis normal sulphated sugar.”

“I know that you may not have the longer-term view, but how do you see going forward for the next couple of quarters?”

“But we expect that this reaction of sharp drop in prices is possibly a knee jerk reaction.”

“One, I think the increase is primarily because there were more Capex added like for Fenesta extrusion plant, which will be about Rs.”

“We will be extracting potash from distillery ash, so that’s another new investment which is about 4,600 tons per annum.”

“So, what will be our peak net debt by the end of FY23 or whenever the CAPEX gets completed?”

“Just a simple question that chlorine so with the current capacity of caustic and then incremental 850 TPD, I am assuming that there will be some extra chlorine left after the use for aluminum chloride and ECH, so have we planned anything going forward for FY25 on this front?”

“Going forward this 40% broadly we should be able to maintain which is through pipelines and this 4% captive will move up to over 10% after the entire complex get expanded both on epichlorohydrin as well as 850 TPD.”

“So, the world actually is seeing India as a supplier for the world market and as we saw last year or in the ongoing sugar season our exports are roughly 9.5 to 10 million tons on all India basis andwe do expect that in the next sugar year also the exports will be roughly 10.5 to 8.5 million ton from India.”

“My next question is on caustic, you mentioned that we expect margins to normalize in next two quarters, so just wanted to understand your perspective on demand scenario going ahead and whether do we expect any serious change in global supply in next few quarters?”

Amit Agarwal

12

Ajay Shriram

11

Saket Kapoor

8

Moderator

7

Pratiksha Daftari

7

K.K. Kaul

6

Ahmed Madha

5

Ajit Shriram

4

Vighnesh Iyer

3

Anurag Patil

2

Ahmed Madha

Our percentage or refined sugar, as a Company, was much lower than our peers. And we will increase our refined sugar production to roughly 60% of capacity. And we do hope to get a premium of between 70 paise to 80 paise per kilo on the refined sugar vis-à-vis normal sulphated sugar. The next question is on the PVC side, the vinyl business as you call it. So, Q4FY22 realization were close to 135 - 140, then current quarter it was close to 128 - 130. What we see as of now is the prices are almost at Rs. 110 or may maybe below that. So, how is your outlook on the PVC demand dynamics in this country and

Amit Agarwal

especially the increase in the imports of China? I know that you may not have the longer-term view, but how do you see going forward for the next couple of quarters? Yes. You're right. PVC prices are seeing a very sharp decline. In fact, the decline started somewhere in the month of February when the anti-dumping duty on imports from China was removed. And then in May the customs duty was reduced further from 10% to 7.5%. But in the last 2 weeks or so beginning of July, we have seen some very sharp declines in the prices. And today, prices are pretty low. But obviously, the demand is still holding. But unfortunately, we have large imports coming from China. The consumption in China has dropped because of the real estate. PVC is a construction polymer. So, the real estate in China is badly hit, and in turn, they are pushing large quantities into the markets in India. But we expect that this reaction of sharp drop in prices is possibly a knee jerk reaction. The fundamentals of the cost h

Amit Agarwal

It will depend on the cash flows but my sense is approximately net debt should be around 1,500 crore by end of FY23.

Amit Agarwal

Just a simple question that chlorine so with the current capacity of caustic and then incremental 850 TPD, I am assuming that there will be some extra chlorine left after the use for aluminum chloride and ECH, so have we planned anything going forward for FY25 on this front? So, my current chlorine consumption if I look at Bharuch and if I exclude hydrochloric acid then my current consumption in Bharuch is about 5% captive and in Kota is about 30% captive. In Bharuch I also supply at current level almost 40% of my chlorine is through pipelines. Going forward this 40% broadly we should be able to maintain which is through pipelines and this 4% captive will move up to over 10% after the entire complex get expanded both on epichlorohydrin as well as 850 TPD. So, that’s the current captive consumption. But we definitely are looking at some more investments in chlorine downstream to increase our captive consumption. So, those are being looked at.

Pratiksha Daftari

My first question is on sugar division. If you could just give the details of sugar production for the whole season that we finished in this quarter and what would be the valuation of the inventory at the end of 30th June?

Amit Agarwal

For this year our total crush was about 549 lakh quintals, our production was close to about 54-55 lakh quintals and our inventory valuation was at about 3,307.