DCM Shriram management said underlying Indian demand remained supported by consumption across textiles, alumina and infrastructure during Q2 FY27. Chlor-alkali capacity utilisation stood at 89%, while flaker capacity allowed the company to export caustic production amid global supply-chain disruption. Better chlorine realisations partly offset weaker caustic prices.
Management said future industry capacity additions could create near-term supply-demand imbalances and pressure prices and margins. Advanced Materials also faced sharp changes in product and raw-material prices, leading to high-cost inventory liquidation and temporary customer-demand deferral. The company said these pressures had largely stabilised. During the quarter, it commissioned a 100 TPD aluminium chloride plant at Bharuch.
Positives
- Chlor-alkali operations maintained a high operating level despite headwinds. Ajay Shriram said: “Capacity utilisation during the quarter stood at 89%.”
- The product mix provided some offset to lower caustic pricing. Ajay Shriram said: “improved chlorine realizations partly offset the impact.”
- Advanced-materials operating pressure had begun to settle. Ajay Shriram said: “These pressures have now largely stabilised.”
Watch-points
- New industry capacity could affect the near-term balance. Ajay Shriram said: “future capacity additions may create near-term supply-demand imbalances and put pressure on prices and margins.”
- Advanced Materials absorbed inventory and customer-timing pressure. Ajay Shriram said: “This led to liquidation of high-cost inventory and temporary deferment of customer demand.”
- Global caustic pricing remained a headwind. Ajay Shriram said: “caustic prices corrected in line with global markets.”
Source: DCM Shriram Q2 FY27 earnings call transcript. This is a summary of a company earnings call, published as general information. It is not investment advice or a recommendation to buy or sell any security. Read the full transcript before relying on any point.
This article is journalism and commentary. It is not a recommendation to buy or sell any security, and it is not professional advice. Read the full disclaimer.
