Ladies and gentlemen, good day and welcome to DCM Shriram Limited Q2 FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, sir.
Thank you, Steve. Good evening and welcome to DCM Shriram Limited's quarter two and H1 FY 2027 earnings conference call. Today we have with us Mr. Ajay Shriram, Chairman and Senior Managing Director, Mr. Ajit Shriram, Joint Managing Director, Mr. Aditya Shriram, Deputy Managing Director, and Mr. Amit Agarwal, Group CFO of the company. We shall commence with remarks from Mr. Ajay Shriram and Mr. Ajit Shriram. Members of the audience will get an opportunity to ask their queries to the management following these comments during the interactive question and answer session. Before we begin, please note that some of the statements made on today's call could be forward-looking in nature, and a note to that effect has been included in the conference call invitation that has been circulated earlier and is available in the stock exchange website.
I would now like to invite Mr. Ajay Shriram to give us a brief overview. Over to you, sir.
Thank you, Siddharth. Good afternoon, ladies and gentlemen, and a very warm welcome to all of you. Thank you for joining us today to discuss the company's performance around Q2 and H1 financial year 2027 results. I will commence with perspectives on the business environment and the strategic updates, post which Vikram will share views on the financial performance. Globally, the second quarter of financial year 2027 operated against a backdrop of sustained structural friction. We continue to navigate an environment characterized by volatile energy prices, shifting tariff pressures, and tighter global liquidity driven by higher interest rates by major central banks, including the Reserve Bank of India. The geopolitical landscape remains highly complex, demanding active reevaluation of supply chains and trade exposures. At the same time, digital technologies and artificial intelligence are becoming increasingly important drivers of productivity, innovation and competitiveness.
For industrial companies, the possibility lies in applying these technologies to improve operating reliability, resource efficiency, decision making and customer responses. Amidst the global calibration, India's position as a reliable, high growth economic anchor has only strengthened. Q1 financial year 2027 real GDP grew at 7.8%, and RBI subsequently projected financial year 2027 real GDP growth at 7.1%, driven by services, private consumption, manufacturing, and infrastructure-led investments. Simultaneously, we face immediate physical challenges on the ground, particularly within the agricultural and rural sectors driven by El Niño. Reservoir storage also remains below the previous year and the long-term average across the country. This will influence agri inputs and rural consumption and rabi cropping conditions over the coming quarters. For us at DCM Shriram, this environment reinforces the value of staying close to what we can control: integrated operations, cost discipline, working capital management, digital execution, and calibrated capital allocation.
We are translating this strategy into action through several key project announcements. First, optimizing cost management and carbon intensity. We are establishing a 40 megawatt peak solar energy plant at Kota for INR 145 crores and installing filter presses in our cement plant at Kota for INR 60 crores. Second, driving operational reliability, we are debottlenecking operations at Bharuch and Kota to improve energy efficiency of our current operations and increase caustic capacity at a project cost of INR 120 crores. Third, advancing forward integration. We are setting up new lines for manufacture of specialty compounds of PVC, specialty medical grades, and diversification into the manufacture of halogen-free flame retardant grades of polymer compounds in our JV, Shriram Teknor Limited, at a total cost of INR 133 crores. Our investment will be up to INR 50 crores as equity into the JV.
A conservative approach to our finances remains central of how we run the company. As interest rates remain elevated, our healthy balance sheet, comfortable leverage, and adequate liquidity positions us well to manage volatility. Crucially, our growth strategy is intrinsically linked to our sustainability commitments. We are advancing our ESG roadmap across resource efficiency, energy transition, and meaningful community engagement. By embedding these principles within our operational DNA, we are ensuring our business remains agile, responsible, and future-ready. This balanced approach keeps us well-placed to pursue organic and inorganic growth opportunities and deliver long-term value for our stakeholders. I shall now invite your attention to industry dynamics across our businesses. First is chemicals. Globally, the chemicals industry environment remains volatile during the second quarter of financial year 2027. Unpredictable energy and input costs, along with uneven demand across major manufacturing regions, weighed on industry economics.
In India, underlying demand remains supported by domestic consumption across textiles, alumina, and infrastructure. Capacity additions over the last few years have been well absorbed by the markets. However, future capacity additions may create near-term supply-demand imbalances and put pressure on prices and margins. Given the headwinds, our chlor-alkali operations delivered a reasonable performance. Capacity utilization during the quarter stood at 89%. Our flakes capacity provided valuable market flexibility, enabling us to export our caustic production despite disruption in global supply chains. While caustic prices corrected in line with the global market, improved chlorine realization partly offset the impact. In hydrogen peroxide, higher natural gas prices raised production costs across the industry, which in turn supported firmer product prices. In advanced materials, operating rates were higher across product categories as we continue to deepen our market presence.
The segment witnessed sharp swings in both product and raw material prices, with a steep increase in Q1 followed by an equally sharp correction. This led to liquidation of high-cost inventory and temporary deferment of customer demand. These pressures have now largely stabilized, providing a more balanced operating environment going forward. During the quarter, we commissioned the 100 tonnes-per-day aluminium chloride plant at Bharuch, taking the total capacity to 250 tonnes-per-day, along with partial commissioning of the calcium chloride plant, taking us to 50% of the plant capacity. That is 133 tonnes-per-day out of 266 tonnes-per-day. We also commissioned the 68-megawatt hybrid renewable power project at Kota, further strengthening our structural cost competitiveness. The 58-megawatt hybrid renewable power project under group captive SPV at Bharuch is progressing as per schedule. Vinyl.
The Middle East conflict kept raw material costs and subsequently PVC prices high. Weak construction demand owing to monsoon and cautious trader bookings owing to higher prices dampened overall demand. The policy support toward introduction of the minimum import price of US$766 per metric ton helped domestic realization, and a weaker rupee further supported PVC prices. Our PVC volumes and realizations both improved meaningfully. Carbide also performed well, with raw carbide production reaching the highest ever level and sales and realization up year-on-year. Near-term PVC prices are likely to remain influenced by energy costs, currency movements, global supply conditions, and domestic trade policy measures. Domestic demand should improve after the monsoon. However, global demand may get impacted by housing demand. Sugar and ethanol.
The global sugar market is expected to move into a deficit of around 2.6 million metric tons in the year 2026/2027 season, compared to a surplus of about 2.1 million metric tons last year. Uncertainty of crops in India and Europe and higher diversion of cane to ethanol in Brazil could widen this deficit further. For sugar season 2025/2026, India is expected to close with a stock of around 3.65 million metric tons on production of 27.6 million metric tons after a diversion of around 3.1 million metric tons of ethanol, domestic consumption of 28.4 million metric tons, and net exports of 0.65 million metric tons. For the coming season, market estimates point to gross production of around 27 million metric tons with some downside risk. Domestic sugar price is currently around INR 4,800 per quintal and is expected to be range bound.
On the ethanol front, the tender for the 2026/2027 ethanol supply year includes ethanol made only from C-heavy molasses and shifts supply toward grain-based feedstocks. Ethanol procurement price of maize-based ethanol has been reduced while that of C-heavy based ethanol has not been revised despite the increase in sugarcane price. With installed capacity of about 2,000 crore liters already well ahead of demand, these developments significantly affect the sugar industry's investments in ethanol. The policy support with respect to fair share of allocations for sugar-based feedstocks and ethanol prices aligned with sugarcane costs are now critical to support the long-term viability of the sector. Fenesta Building Systems. Fenesta Building Systems sustained its growth momentum, driven by healthy volumes across both retail and project segments, despite a volatile real estate market. Margins continue to reflect the changing product mix, upfront investments in scaling our new business platforms, and higher input costs.
During the quarter, Phase 1 of aluminium extrusion plant at Kota was commissioned, while the second phase is in the process of installation and commissioning. Work on the wooden doors facility is moving as per schedule. Moving on, the Agri Input business portfolio comprises of Shriram Farm Solutions, Fertilizer, and Bioseed businesses. First, Shriram Farm Solutions. The quarter was shaped by one of the weakest monsoons in over a decade, driven by El Niño conditions. Although late season rains helped sowing catch up in the near normal levels, a shortened application window, moisture stress on crop, and tighter farmer liquidity kept demand for agricultural inputs selected. The SFS business witnessed a decline in top line in Q2 financial year 2027 compared to Q2 financial year 2026, largely account of difference in timing of sales of rabi wheat seed.
The portion of the timing related impact may reverse in Q3, subject to crop conditions and channel demand. Notwithstanding these conditions, the crop protection vertical registered healthy growth, backed by a differentiated product portfolio and ability to tap weather-driven demand. The business introduced four new products, including a promising wheat variety from our in-house R&D, while our digital campaigns reached over 1.5 crore farmers. Fertilizers. Natural gas prices for the urea business rose further during the quarter, as the West Asia conflict continued to disrupt LNG supplies. Plant operations remain stable, and we continue to focus on improving energy efficiency, maximizing urea production, and keeping tight control over fixed costs. The increase in gas prices has raised the working capital requirement associated with subsidy receivables.
Given the high gas prices, the indigenous urea fertilizer subsidy requirement for the year could be higher at INR 1.2 lakh crores versus the Union Budget of INR 85,000 crores. Bioseed. The kharif season remained very challenging for the Bioseed business due to a broader climatic pressure, especially in South and Central India. Despite the late recovery in rainfall, acreage under key crops such as corn, cotton, and paddy stayed below last year's level. This weighed on corn and paddy volumes, while higher input production and logistics costs added to margin pressure. Our volumes are better than last year. The margins are also impacted by provision for doubtful debt in India and seed discard in Philippines. We remain focused on portfolio quality, inventory discipline, collections, and strengthening our market position ahead of the next planting season. I will now request Vikram to provide the financial perspectives. Vikram, over to you.
Thank you. Good evening, everyone. I will now take you through the financial highlights of Q2 and H1 FY 2027. Net revenues, net of excise duty for Q2 FY 2027 were at INR 3,977 crores, versus INR 3,272 crores in Q2 FY 2026, an increase of 22% year-on-year, driven by Chemicals, Vinyl, Fertilizer, and Fenesta businesses. PBDIT for Q2 FY 2027 was at INR 319 crores versus INR 408 crores in Q2 FY 2026, mainly due to higher input costs in Chemicals and lower earnings in the Agri Input businesses. The previous year's quarter also included a one-time positive impact of INR 76 crores towards incentives received from the government of Gujarat in the Chemicals business and INR 15.5 crores in Sugar business on account of upward revision of power rates in the last year. Chemicals. The business reported an increase in revenue of 47% year-on-year.
Caustic soda volumes were up 2%, while ECU prices were higher by 6%. New products including hydrogen peroxide, aluminium chloride, and Glycerine to ECH to epoxy advanced materials value chain contributed positively towards the top line. The PBDIT for this quarter stood at INR 158 crores against INR 254 crores last year as higher input costs more than offset the benefit of better realizations and volumes. Further, last year there was one time positive impact of INR 76 crores towards incentives from the government of Gujarat. Vinyl revenues increased by 20% year-on-year, driven by higher volumes and realizations in both PVC and carbide. PVC volumes rose 29% and prices 25%, while carbide volumes and prices were up 15% and 16% respectively. PBDIT was higher at INR 51 crores as compared to INR 12 crores last year, led by better volumes and realizations, partially offset by higher input costs.
Sugar and Ethanol business revenue net of excise duty was higher by 10% year-on-year. Domestic sugar prices were up 14%, while volumes were lower by 6%. Ethanol volumes were up by 24%, a timing difference. PBDIT for the segment came in at INR 62 crores as against INR 33 crores last year. In Q2 FY 2026, there was a significant positive impact of INR 15.5 crores on account of upward revision of power tariffs by UPPCL as mentioned earlier. Fenesta Building Systems revenues increased by 22% year-on-year, with the project vertical leading the growth. PBDIT for the quarter was up 15% at INR 49 crores, although margins were slightly lower. This was due to the change in product mix, elevated input costs, and higher fixed expenses for setting up new revenue platforms for the future.
Shriram Farm Solutions revenues declined by 10% year-on-year due to lower volumes across the seed and specialty nutrition verticals. PBDIT for the quarter was lower at INR 78 crores as against INR 106 crores last year. Fertilizer revenues were up by 40% year-on-year, led by realizations which were higher by 46%, reflecting higher gas prices. PBDIT increased by 25% to INR 25 crores, driven by better margins on account of higher gas rates and improved efficiencies. Outstanding fertilizer subsidy was INR 446 crores on September 30th, 2026, as against INR 187 crores last year. Bioseed revenue was lower for the quarter and half year as severe El Niño conditions weakened demand across the industry. PBDIT for the quarter stood at negative INR 41 crores against negative INR 7 crores last year.
The decline reflects lower volumes, which increase the burden of fixed expenses, along with higher provisions for doubtful debts in India and seed discards in Philippines. At an overall level, the company's net debt is at INR 917 crores as on September 30th, 2026, as against INR 773 crores as on September 30th, 2025. Return on capital employed for September 2026 came in at 12%, compared with 15% last year. The Board announced an interim dividend of 200%, amounting to INR 62.38 crores. With several of our key projects, including aluminium chloride, calcium chloride, aluminium extrusion facility in Fenesta at Kota, renewable power project now fully or partially commissioned, our priority is to ramp them up efficiently and capture the full benefits of integration across our various value chains. Sustainability remains central to this journey.
Our growing renewable energy capacity is strengthening our energy security, advancing our decarbonization goals, and improving long-term cost competitiveness. That concludes my opening remarks, and I request the moderator to please open the forum for questions and answers. Thank you very much.
Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, if you wish to ask a question, you may press star and one. Our first question comes from the line of Riya Mehta with Aequitas Investments. Please go ahead.
Thank you so much for giving me the opportunity, and congrats on the results . I just wanted to understand on the chemical division, which is caustic and other non-caustic chemicals. We are seeing your margin pressure, and you mentioned that there is input pressures. Could you explain the breakup of this negative margins or on a YoY basis, the decline, even adjusted for the exceptional items, there is a decline. Just wanted to understand what contributes.
Yeah. So Riya, in the Chemical business, across the board, whether we look at the new chemistries that we got into, as well as the new products, I mean, the existing lines of business, which we expanded. What has really happened is that the cost of production has, in this quarter, the cost of production has gone up in the range of about 6%-8% across the chemistries. And selling price has come off in the range of around 4%-6%. So effectively, the margins have got impacted all across, except one or two smaller products. But for larger products, it has got impacted. The only product which has definitely done better is hydrogen peroxide, because there our hydrogen is in-house and the prices went up because of the gas prices. That was de-linked. For rest of the products, that is how the margins have come down.
Could you help me with the specific raw material prices which have increased in the cost of production? Because as I understand, the major cost of production is power for us, and we have entire linked up power for Caustic division with the PPAs signed. Where is the incremental cost of production coming from, and in which particular chemical? If you can go into specifics of that.
It will again vary on the product. What you said is right, power is the key raw material, and there the coal prices have gone up significantly, and they are still going up, right? Probably we keep seeing the impact of higher costs, but that cost is primarily impacting our caustic business because that is where the energy intensity is high. Whereas for example, in case of epichlorohydrin and the downstream of epichlorohydrin, there the glycerine prices, for example, they are quite volatile. In the last quarter, we were consuming high-cost glycerine. Now they have come down. It is pretty volatile. Given the West Asia crisis, the freight and all that is so disrupted that it is very difficult to say how the prices will move. But yes, each chemistry has a different cost curve and the key cost drivers.
Also the last question remaining pertaining to Chemical division. What will be the incremental depreciation account of the newer plants which are being commissioned going forward?
Incremental?
On depreciation.
See, in the half year, the incremental depreciation for the quarter, for example, the incremental depreciation was about the total increase that you saw in depreciation, INR 10 crores came from the Chemical business. Going forward, I don't think it will be very significant, at least in rest of the year, given the fact that most of the projects have been capitalized. There will be some increase because calcium chloride and aluminium chloride got capitalized in Q2. But nothing very significant increase because of that.
Got it. Coming to the PVC demand. We've been listening to calls with Supreme Industries and all those companies, and they're mentioning about demand destruction from their end, reducing the volume guidance. With this kind of pricing for PVC, what are the current prices currently? What is the trend going forward? And what do you see of this demand?
See the current prices of the PVC are in the range, the domestic prices are in the range of around INR 95,000 to INR 100,000 a tonne. Those are kind of prices currently prevailing for PVC. What was the next question?
Just wanted to understand the demand side of it with the current PVC pricing reaching so high. I think the last cycle of the peak was around INR 90,000 and we have surpassed that peak. Just wanted to understand how the demand is panning out for you.
See, demand is, because as was mentioned in the Chairman's remarks as well, the demand will start picking up now that the monsoons are over. So Q3 and Q4 are good seasons for PVC. We are not a very large producer of PVC, so we are not seeing any challenge. We are producing at 100% of our capacity, a little more than that actually, and the demand is good for us.
Got it. Do you see the China dumping happening again, considering that the prices have been above MIP and with the overcapacity still being in China, that they will be starting to dump again?
Where am I? As I mentioned in my opening remarks, we already have a MIP-
Right
of $766, plus there is an import duty also. With that, the prices today I would be expecting to be quite stable.
Okay. Congratulations on that. My last question is on the Sugar division. Just wanted to understand, which is the mandate of C-heavy, how much crore liters of ethanol can we make from sugar from C-heavy? Second was for the maize division. At the current newer rates notified by the government, what is the kind of corn breakeven cost we are looking at, and since corn is also increasing, will we be going for maize-based ethanol?
See, in terms of allocation, in terms of what we can manufacture, our total capacity to manufacture is in the range of around 15 crore to 16 crore liters. Out of it, almost 50% is based on the molasses and 50% is based on grain.
Correct.
Now, as far as the maize prices, the ethanol-based maize price coming down and the maize price itself going up, there will be shrinkage of margins. We will try to optimize the FCI-based rice ethanol, is what we'll try to optimize to whatever extent we get the allocation of FCI rice. That's what our strategy will be. But it's very dynamic. See, frankly, given we feel that the feedstock is going to be a challenge for ethanol this year. Let's see how it pans out. It'll be very dynamic.
And we would be able to easily manufacture, I think, 8 crore liters from C-heavy, right?
Yeah. We should be.
Got it. As for Fenesta's new order book, was a little separate this time. Was it a function of some particular event?
So see, I think for Fenesta now, order book, unless it is a significant fall, order book is not so relevant because what happens is that project businesses become almost 45% of the business, and that is what can cause some bit of volatility in the orders. So one day you have a large order and then the order book looks big. Maybe two quarters down the line, that order book might change because that order was only there and some of the other orders get executed. But it's still a very healthy order book. We don't see any challenge.
So that trend will be continuing?
New products.
Yeah. Sequentially it is better. That is one. And obviously there are new products which are, facade is gaining ground, aluminium windows are gaining ground, extrusion has been commissioned. That will also gain ground. So I think that has been our strategy to build platforms so that the growth is balanced and doesn't get impacted by one kind of, or one category of product.
Got it.
And by last quarter, we will also be doing wooden doors.
Right.
That will be another category also which will add to the portfolio.
I think Fenesta has been fantastic for us and going forward, looking forward to seeing better numbers. Thank you, Amit. That is my question. I will get back into the further question.
Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question comes from the line of Jainam Ghelani with Svan Investments. Please go ahead.
Hi, sir. Thanks for this opportunity.
Sure.
Most of my questions have been answered. Just one question was that could you give an update on the demerger process as we were planning?
Advanced stage.
So see, demerger process is on. The management is working on it. As I had mentioned in the previous interaction as well, that given the complexity of the organization being a legacy organization, these businesses are quite interlinked and we do not want to roll out a scheme which we might have to make modifications later on. We are trying to filter that, and now we are in a pretty advanced stage. We hope to get it to the board very soon.
Okay. So we can expect that in two to three quarters, right? In Q1 FY 2028, would that be a good timeline?
Yes. That is what we are targeting.
Thank you.
Thank you.
Getting it to the board.
Thank you. The next question comes from the line of Rajakumar Vaidyanathan with RK Investments. Please go ahead.
Yeah. Good evening. Thanks for the opportunity. Sir, I have two questions. The first one is on the Vinyl segment. I see that the PVC realizations have gone up quarter-on-quarter, and even your revenues have gone up, but there has been pressure on your margins. The PBDIT margins are almost 21.9% vis-à-vis 22% something in the previous quarter. Just wondering what is the outlook for this segment?
Okay. Amit, Go.
So see, one, as far as my information goes and the information that we have provided, the margins have improved significantly in both year-on-year as well as quarter-on-quarter because the product prices have improved. Yes, the cost have also gone up, but the increase in realization is more than the increase in cost. That is point number one. Going forward, see, it's difficult to say, although we are a little hopeful on the prices being firm. As we mentioned in the Chairman's speech as well, there is minimum import price which should keep the business healthy. But what happens to the energy prices, because energy is almost 60%-70% of the cost of production.
Now that is one issue, but what we are doing as a process is also that see, these are momentary that energy prices have gone up and things like that. But what we are doing is getting more and more of renewable energy, like almost the entire renewable energy in Kota, which we were looking at almost average 32 MW, 33 MW. That is about to get fully commissioned. Part was commissioned. Part is about to get commissioned in maybe next few days. So all those steps have been taken to optimize or reduce our cost of production. But still, coal still forms the majority of the cost, and the cost of that is going up. So let's see what happens, and hopefully it should be good.
Okay. So any possibility of margins improving, or it will be maintained at current levels?
It'll all be a function of how the price moves from here. If it remains at this level, then the margin should ideally come down. If it goes up, then probably yes.
Okay. The second question is on the sugar segment. I heard the chairman, sir, talking about the overall outlook for the country as a whole. Just want to know for DCM per se, what is the production that you are targeting and how much reduction or if you can give some color on vis-à-vis last year, how much you are expecting?
It's a little too early. We haven't even started crushing. We will be starting crushing for some of our mills in the first week of November, so it's a little too early. Although if we look at the India scenario as well as the scenario in U.P., obviously India scenario is that the cane availability will be low given that there has been drought-like conditions in Maharashtra and Karnataka, which has impacted the cane. In U.P., there have been recent rains in the month of September, because of which there's been lodging of cane. That can also impact. Let's see in our region how it works out because within U.P. also it'll be region to region. Probably we'll let you know in next two, three months' time as to how it pans out.
Okay. Is it fair to assume that there will be pressure on both the cane crush volume as well as on the recovery rates?
It's too early to comment. It also depend on what the fog is like in the winters. That'll impact the recovery. As the climate progresses, what is the sunlight and all that will impact the recovery.
Okay. Thank you so much.
Thank you.
Thank you. Participants who wish to ask a question may press star and one. The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.
Yeah. Namaskar, sir. Hope I'm audible.
Namaskar.
Yes, sir. Sir, firstly, in terms of the caustic soda price trend, how are the current markets shaping up for the caustic soda realization? I think so there was a dip post the first quarter. But in our ECU realization or the one which we have given about that shows an increase. Can you explain how the price trends have been? And other question was pertaining to aluminium chloride realization, how this product price realization is shaping up and what is our current utilization there?
Yeah. So see, what we have given in investor presentation is the ECU. What we were talking about is that the caustic prices have come down. However, the ECU is a mix of caustic and chlorine. The negative chlorine prices which were in Q1 around INR 8,000, I don't have the exact number, but ballpark around INR 8,000. In Q2, they came down to around INR 5,000.
-INR 5,000.
-INR 5,000. Now they are further lower, so less than -INR 5,000. So that has been the reason why it got offset.
Okay. And pertaining to the aluminium chloride realization, sir, and the volume?
I don't have the exact number here. Again, as I said, aluminium chloride, one, it's a small part of the business, and the reason why aluminium chloride is there is to support the caustic utilization. And caustic utilization has actually gone up. If you see our utilization vis-à-vis same period last year, caustic utilization was around 79%-80%, and this year or this quarter, the utilization is 89%. So that shows the success of having the aluminium chloride plant, which has helped utilization along with the market development activities as well.
Also the aluminium chloride prices are closely linked to the aluminum prices. So there is a correlation there. So if the cost, which is aluminum for us is a cost. If that goes up, then the aluminium chloride prices also do move up. There may be a bit of a lag. So the margin depends on the prices of course. But they are reasonable.
Okay. Right. And sir, currently, what is our captive consumption of chlorine and what is the roadmap ahead that, say, two years down the line, what would be the captive number likely?
For us actually, we have two locations, just again, Bharuch and Kota. In Bharuch, after all our projects are commissioned, we expect to have a 45% captive consumption of chlorine, and Kota, it will be in the range of 62%. Additionally, what is a big strength for us, especially in Bharuch, is that we have a number of customers or partners who have grown with us over the now 30 years. They are our pipeline customers, and they consume approximately 27% as well. If we put those together, it will be in the range of 70% between captive and pipeline customers for us.
Correct, sir. Just to take into account the caustic soda prices, how has the price trend been, the realization for first quarter versus the second quarter? What have been the actual decline of the import parity prices? If you can give a number to the same. Second question, second addition to it is, sir, have we heard or seen any announcement from a big player like Grasim outlining their strategy that they would be not selling any further chlorine into the market over a period of time and creating that ecosystem wherein entire chlorine would be utilized since they are the largest player? Correct me here. I read it, but I am not confirmed about it, so would like to have your thought process of how the largest player is planning regarding chlorine consumption, completely self-consumption by them in time ahead.
To your first question, actually, what we look at is the ECU price, which is the combination of the caustic price and the chlorine price. I think we have already shared earlier in the con call that caustic prices have been range bound, but chlorine prices have moved up. They were more negative, now they are less negative or closer to zero. Overall, ECU prices have improved. Of course, our costs have also gone up because it is linked with energy, and energy costs have gone up overall. That is to your first point. We will not be able to comment on any competitor or any other player's strategy. That would not be fair for us to say.
Our focus is always that how can we remain competitive, optimizing our cost structures, focusing on intelligent integration, so that we remain robust even in the down cycles, and we enjoy the upcycles that are there.
Right. Last point on the same, sir, what would have been the import number for the six months of caustic for the country? How much have we imported?
I think we may not have the country's import numbers right now directly with us, but if you can reach out to our team, they will be able to share those numbers subsequently.
Okay. Lastly, sir, big corporate houses are also contemplating huge capacity for caustic, I think so, the largest corporate in the country. So how will that change the entire ecosystem going ahead with players like us who are selling caustic soda, and their main attraction would be the chlorine realization for the PVC integration. So what is the current thought process of the management in terms of those big investments coming in the sector and our preparation for the same?
Yeah. There have been announcements of two large capacities coming into the market over the next couple of years. I think as we said earlier, our focus is continuously on how we optimize our cost structures. There can be, at times in the industry, some demand-supply mismatches, and we have seen that in the past decades as well from time to time. But overall, we feel that the India story is very robust, and if we take a three-year and five-year time horizon, we expect the industry to continue to perform well. While there is caustic capacity coming in, at least there will be no surplus chlorine coming into the market because that will all be integrated into PVC by the two large new capacities coming in.
I think we will have to see how it evolves, but these are also linked to global prices of caustic and PVC. We feel in a medium to long-term time horizon, these capacities will get absorbed, and the demand will continue to grow.
Yeah. Thank you .
Yes, and of course, we have exports also as a strong lever now.
Yes, sir. I was alluding to that point only, with net of import and export, how much we imported in the country. I will take it off then. Thank you, sir.
As a country, we are now a net exporter. We used to be a net importer some years back, but now we are a net exporter as a country.
Okay. With the current logistic cost and-
I am sorry to interrupt, Mr. Saket.
It's all right. I joined the queue. Yeah.
Yeah.
Yeah.
Thank you so much. Thank you. The next question comes from the line of Natwar Modi, an individual investor. Please go ahead.
Yes, sir. Good evening, sir. I wanted to request you about this chlorine in-house consumption. So that we can get rid of this minus price and all that. I request you to look into the possibilities as far as possible, practically.
Yes, I think we've already shared earlier in the call that between our captive consumption and our pipeline customers who are our trusted partners, we have approximately 70% of the chlorine capacity that is integrated. We also have some tie-ups through some arrangements with other customers in the region. We feel quite confident that compared to a few years back, we now have a healthy level of chlorine integration. We think we are in a better position now.
Right. The other thing I wanted to know, sir, in 2027, 2028, can we expect the turnover of INR 20,000 crore, sir? Consolidated turnover? Given our expansion and modernization and all that we are doing, at least INR 20,000 crore we will reach?
See, we generally avoid giving forward-looking statements. We are continuing to invest in growth. As you would have seen in last three, four years, we've invested close to about INR 4,500 crore, and the pipeline is still there. We would like to invest more. So we'll continue to grow, but giving the exact number is a little difficult at this stage.
Okay, sir. Thank you.
Thank you.
Thank you. We have a follow-up question. It is on the line of Riya Mehta with Aequitas Investments. Please go ahead.
Yeah. Hi, Abhinav this side. My question was regarding how much of our power cost is backward integrated.
How much of our?
Power cost.
Power cost.
Captive. Backward integrated.
Yeah. Our entire power is captive. We don't source except. Largely we don't source any power from the grid. Either it is coal-based or it is renewable. And renewable also our target is in next one year, out of a total power requirement, around one-third should be coming from renewable.
Okay. And what is the current share of renewable?
Current share, I think at peak level, we are at about 107 MW out of our total requirement of, excluding sugar, I am saying, the coal-based part today is about 345 MW. Out of that, 107 MW peak is already there. We are planning to add another 70 MW to 80 MW.
And switching to renewable, how much is savings as percentage of renewable when you switch and use higher input?
When you say savings, I think renewable is always given the kind of coal prices, it will be a function of that. But yes, all these investments have returns on investment in excess of 20%, 25%.
Okay. My last question was regarding Bioseed. Is it a multi-year use seed? Let us say kharif was bad, we can use the same seed in the next kharif, or do we need to write it off completely?
See, the seeds like what we are present in, the large volume seeds in Bioseed, we are in cotton, corn, and paddy. All these seeds have, especially cotton, has a life of almost four to five years. Five years, actually. The other seeds have a life of two to three years.
Okay. What was the quantum of the write-off which we took regarding inventory in Philippines?
This was in Philippines, where we took a write-off of about INR 12 crores for the half year.
INR 12 crores.
Yeah.
Okay.
Yes.
What about India?
India, it was more of provision on the doubtful debts, especially some of the debts which were on the supplies to the government. There, as per the company policy, they are not bad actually, but we have an accounting policy under which we make provisions after a particular aging. We have done that provisioning. Hopefully, we will recover that much.
What was the amount?
The amount in this quarter was about INR 7 crore-INR 8 crore.
Oh. Thank you. That is it from my side.
Thank you.
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Thank you. Ladies and gentlemen, thank you for joining us on our earnings conference call. The operating environment remains challenging, shaped by geopolitical uncertainty, volatile energy costs, and evolving policy frameworks. We remain confident of India's long-term growth potential and resilience of our diversified businesses. As our recent investment gets ramped up, our focus is on disciplined execution, operational excellence, and building the agility to respond quickly to changing conditions. We continue to use and implement digital technologies to improve productivity, sharpen decision-making, and deepen our engagement with customers. Thank you very much once again for your continued trust and support. Goodbye.
Thank you, sir. On behalf of DCM Shriram Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.