DCM Shriram's shares witnessed a remarkable surge of 10.1% on Thursday, reaching an intraday high of ₹1,153.05 on the BSE. The rally was fueled by the company's impressive second-quarter results, presenting a chance for market participants to carry out share market investment.
Trading at ₹1,120.2 per share early morning, the diversified conglomerate commanded a market capitalization of ₹17,468.66 crore.
Strong financial performance drives market rally
The company showed a 95.16% year-on-year increase in consolidated net profit to ₹62.92 crore. The company's total income also saw a significant rise of 11.81%, reaching ₹3,183.98 crore in Q2 FY25, compared to ₹2,847.42 crore in the corresponding quarter of the previous year.
Strategic expansion into renewable energy
In a significant move towards sustainability, DCM Shriram's board approved multiple strategic investments, including an equity investment of up to ₹60 crore for acquiring a 28% stake in Special Purpose Vehicles (SPVs) to establish a 68 MW wind-solar hybrid renewable power project. Additionally, the company sanctioned a capital expenditure of ₹23 crore for a renewable power project in Kota, Rajasthan, demonstrating its commitment to green energy initiatives.
Chemical business expansion and shareholder returns
The board also gave the green light to a substantial capital expenditure of ₹310 crore for setting up new chemical facilities in Jhagadia, Bharuch, including a 100 TPD aluminium chloride facility and a 225 TPD granulated calcium chloride facility. In a move to reward shareholders, the company declared an interim dividend of 100% (₹2 per equity share) for FY2024-25, with the record date set for November 11, 2024, and payment scheduled before November 28, 2024.
Market performance and future outlook
Despite the broader market showing signs of weakness, with the BSE Sensex down 0.16% at 79,818.10, DCM Shriram's stock has demonstrated resilience. Over the past year, the company's shares have gained 12.7%, although underperforming the Sensex's 25% rise during the same period.
As a diversified conglomerate with interests in agribusiness, chemicals, and textiles, DCM Shriram's recent investments in renewable energy and chemical facilities position it well for sustainable growth, while maintaining its commitment to innovation and market leadership across its various business segments.
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