India's DCM Shriram reports 19% fall in Q2 profit as costs jump
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Indian chemicals-to-sugar maker DCM Shriram Ltd reported a 19.2% fall in second-quarter profit on Wednesday, hurt by challenges in its vinyls business and higher excise duty, power and fuel costs.
The New Delhi-based company's consolidated profit fell to 1.28 billion rupees ($15.4 million) in the three months ended Sept. 30, from 1.59 billion rupees a year ago.
Its total expenses jumped 36% in the quarter.
Surging inflation and cost pressures are threatening DCM Shriram's margins after a rebound from several pandemic-hit quarters. It warned last quarter that its main chemical business may see some softening on reducing global demand.
Revenue from DCM's chloro-vinyl business, which produces chemicals like caustic soda and vinyl, jumped 15% year-on-year to 9.36 billion rupees in the quarter, but was less than first-quarter revenue of 11.4 billion rupees.
Revenue from its sugar business rose 20.9% year-on-year to 7.53 billion rupees, but dropped 9% from the previous quarter.
"Vinyl business is facing headwinds of lower product prices with global decline in demand and higher sourcing from China. The major concern today for Chloro-Vinyl business is high energy prices which continue to be firm given the geo-political instability," said company said in an exchange filing.
