DSCL Q2 Net plunges 95% on losses from sugar business

NEW DELHI: DCM Shriram Consolidated Ltd (DSCL) reported 95 per cent decline in its consolidated net profit at Rs 1.4 crore during the second quarter of this fiscal mainly due to losses suffered in sugar business.

The company's consolidated net profit stood at Rs 28.9 crore in the year-ago period.

However, net revenue rose by 26 per cent to Rs 1,689.9 crore in the July-September period of 2013-14 fiscal compared with Rs 1,342.2 crore in the same period of last financial year.

Apart from sugar, DSCL is engaged in the manufacturing of fertiliser, bio-seeds, cement and chloro-vinyl among others.

"Unfortunately, sugar business has pulled us down," DSCL Chairman & Senior Managing Director Ajay Shriram said.

"The sugar profits have swung from positive Rs 31.3 crore to negative Rs 24.7 crore, corresponding to the swing in sugar margins from positive Rs 449 per quintal to negative Rs 249 per quintal," he added.

Shriram said that sugar prices have fallen during the last six months, leading to cane arrears of Rs 90 crore to farmers.

DSCL's Vice Chairman & Managing Director Vikram Shriram said the operating environment for the sugar business particularly in Uttar Pradesh is very challenging with state government fixing very high cane prices without any linkage with sugar prices.

"The resulting high cost structure has made the industry uncompetitive vis-a-vis other states and imports," he added.

Chloro-Vinyl and Shriram farm solution segments witnessed profit growth of 16.2 per cent and 90.6 per cent respectively.

The rural retail arm Hariyali Kisaan Bazaar is nearing break-even level after the implementation of rationalisation plan.