DCM Shriram Limited Q3 FY26 Earnings Call Summary

Summary

DCM Shriram Limited - Q3 FY 2026 Earnings Call Summary Friday, January 23, 2026, 4:00 PM IST

Event Participants

Executives 4 Aditya Shriram (Deputy Managing Director), Ajay Shriram (Chairman and Senior Managing Director), Amit Agarwal (Group CFO), Vikram Shriram (Vice Chairman & Managing Director)

Analysts 4 Ahmed Madha (Unifi Capital), Pujan Shah (Molecule Ventures), Raj Vyas (Bonanza Portfolio), Rajakumar Vaidyanathan (RK Invest)

Financials & KPIs

*Calculated based on mentioned YoY % changes from standard reporting bases.

Geographic & Segment Commentary

• Chemicals: Revenue grew 30% YoY as new projects (Hydrogen Peroxide, Epichlorohydrin, Epoxy) began contributing. However, PBDIT fell 8% due to stabilization costs and pressure on chlorine prices. The ECH plant reached 100 TPD (two-thirds capacity) in January 2026, with full commissioning expected by Q4 FY26 end.
• Sugar & Ethanol: Performance was bolstered by a ₹36 crore reversal of a retrospective levy provision. While production outlook is positive with recovery rates up 0.4%-0.5% YoY, management noted that rising SAP (State Advised Price) costs are pressuring margins at current sugar prices (₹4,050/quintal).
• Fenesta Building Systems: Reported strong 28% revenue growth, though PBDIT dropped to ₹35 crores from ₹43 crores YoY. Margin contraction was attributed to a shift toward the lower-margin facade business and rising aluminum prices. The new aluminum extrusion project in Kota is slated for phase one commissioning by Q4 FY26.
• Agri-Inputs: Shriram Farm Solutions saw record research wheat seed sales of 1.14 lakh tons (+20% YoY). However, profits were hit by lower-than-targeted sales (target was 1.3 lakh tons), forcing excess stock liquidation at mandi prices below cost.

Company-Specific & Strategic Commentary

• Project Commissioning: The Epichlorohydrin (ECH) plant was commissioned in Oct '25; management expects efficiency and margin stabilization by Q4 FY26 end.
• M&A Integration: The acquisition of Hindusthan Speciality Chemicals (HSCL) contributed ~₹90-100 crores in quarterly revenue. Management targets EBITDA breakeven for this unit within 12 months of the August 2025 acquisition.
• Corporate Restructuring: The demerger of the consumer-facing business (Fenesta) is in advanced stages. Management expects clarity and a finalized structure within the next 3-4 months, pending government approvals regarding land leases in Kota.
• Strategic Partnerships: An MOU was signed with Bayer India to explore collaborative opportunities in crop protection and distribution, focusing on technical and product prowess.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

PVC Import Protections

• Question: What is the status of protections for the PVC industry given the lack of Anti-Dumping Duty (ADD)? (Pujan Shah)
• Answer: Management is actively pursuing a Minimum Import Price (MIP) with the Commerce and Finance Ministries, as average import prices fell from ~$800 to ~$600. They are also pushing for Quality Control Orders (QCO) to restrict low-quality imports (Ajay Shriram).

Demerger Timeline

• Question: What is causing the delay in the spin-off announced 10 months ago? (Ahmed Madha)
• Answer: Delays are due to complex inter-linkages in a 100-year-old organization, specifically land lease structures in Kota requiring government clarification. Expectation is to resolve this in 3-4 months (Amit Agarwal).

Chemical Segment Performance

• Question: Can you quantify the losses in the new ECH and Epoxy businesses? (Ahmed Madha)
• Answer: ECH is not yet making money as technology stabilization takes time. HSCL (Epoxy) had losses at the EBITDA level on ₹90-100 crores revenue, but 100% capacity and efficiency are targeted by Q4 end (Amit Agarwal/Aditya Shriram).

Fenesta Margins

• Question: Why have margins dropped to single digits? (Raj Vyas)
• Answer: Investments in the new facade business and higher aluminum costs caused the dip. A normalized margin of 14% is the long-term target once scale is achieved (Amit Agarwal).

Key Takeaway

DCM Shriram delivered a resilient Q3 FY26 with 13% revenue growth to ₹3,811 crores, though PBDIT growth slowed to 4% (₹560 crores) due to stabilization costs and pricing pressures. The quarter was defined by the commissioning of the Epichlorohydrin (ECH) plant and the integration of the Hindusthan Speciality Chemicals (HSCL) acquisition, which added ~₹100 crores to the top line but remained EBITDA negative. Strategically, the firm is pivoting toward higher-value downstream chemicals and expanding its consumer-facing Fenesta segment, which saw 28% revenue growth. Looking ahead, management expects ₹4,000-5,000 crores of recent CAPEX to drive significant profit accretion starting in FY27 as new capacities stabilize. Key watch points remain the volatile chlorine and PVC pricing environment, the implementation of Minimum Import Prices (MIP) for PVC, and the finalized timeline for the corporate demerger of the consumer business.