Finding The Delicate Balance

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: It’s been a new beginning for the Rs 1400-crore DCM Shriram Limited, run by the two sons of late Lala Shri Ram, Ajay Shriram (chairman and senior managing director) and Vikram Shriram (vice chairman and managing director). Not only have the market and analysts identified the company as a good investment case, the diversifications initiatives undertaken by the company over the past two years have now started yielding results.The company’s stock shot up from Rs 50 in march last year to Rs 270 in September 2003 and new areas have been added.

The relatively conservative Ajay Shriram is now looking at the business in a renewed manner and looking at continuous modular expansions in commodities to take advantage of commodity cycles, to grow the value-added and services businesses, getting closer to the customers and strong focus on financial performance and a continuous improvement in cost of debt.

After initially being an agri-based company, the company diversified into retailing to reach out to the customers through the one-stop multi-brand malls for farmers and uPVC windows and doors- an alternative to wood.

Core Business
Despite diversifications into retailing and other value added businesses, the biggest contributor will remain the agri-business or the urea, sugar and other commodity business (PVC Resin, Chlor-Alkali, Cement), which together contribute around 92 per cent to the company’s total revenues. It may come down to around 80-85 per cent by 2006-07 with the contributions increasing from the retaining business, says Mr Ajay Shriram.

Ajay Shriram, Chairman and senior MD and Vikram Shriram (behind), Vice Chairman and MD, DCM Shriram Ltd.