This agri-based company shares hit new high today amid heavy volumes, scrip up 32% in 3 sessions

In an otherwise negative market, DCM Shriram share price surged 18.5 per cent and touched a new life high of Rs 1,199 on the BSE intraday trade amid heavy volumes on Monday.

Minutes ahead of market close, the stock was trading around 4 per cent higher at Rs 1048 per share as compared to a 1.11 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped three-fold, with a combined 2.34 million shares changed hands on the NSE and BSE.

The stock of DCM Shriram has spurted 60 per cent in the last one month, as against a 0.20 per cent rise in the Sensex. While in the last three days the stock has jumped over 32 per cent.

The company reduced its net debt to Rs 180 crore as on March 31, 2021, from Rs 1,623 crore as on March 31, 2020. The debt reduction led by lower sugar inventory and significantly lower fertiliser subsidy outstanding. 

DCM Shriram is a diversified company with interests in agri-value chain (urea, sugar, seeds, and trading of agri-inputs) and the chloro-vinyl chain (chlor-alkali and PVC). 

Besides, the company is involved in certain other related businesses to take advantage of vertical integration, such as Fenesta Building System (UPVC doors and windows), cement (produced at its integrated Kota plant) and PVC compounding (50:50 JV with Axiall Inc., USA).

Credit rating agency ICRA, on June 29, 2021, had upgraded the term loan and fund based facilities of DCM Shriram to ICRA AA+ from ICRA AA with a stable outlook. 

The rating revision factors in the significant decline in DCM Shriram’s net debt levels, driven by the improvement in the working capital cycle of the fertiliser and sugar segment, leading to net debt/OPBDITA of 0.1x times as on March 31, 2021.