DCW Ltd

This 76 year old company, formerly Dhrangadhra Chemical Works Ltd, makes chemicals and has four verticals -  soda ash, Caustic Soda, Synthetic iron oxide pigments & PVC.

Its performance for Q2FY17 was good, mainly on the back of lower costs and better performance from the synthetic iron oxide pigment unit. It posted a 12% (YoY) drop in net sales at Rs.336 crore. Costs were down 14% led mainly by a 7% drop in raw material costs.

EBITDA stood at Rs.45 crore, up18% and margins improved to 13.39% from 9.92%. It ended the quarter with a net profit of Rs.9 crore, up 80%. The company’s debt as at 30th Sept 2016 stands at Rs.600 crore.

Its two verticals – soda ash, which contributes 14% to topline and caustic soda, which contributes 34%; both did not do well, reporting lower income and EBIT. What saved the day was the Synthetic iron oxide pigments vertical which showed a 4 times rise in revenue and it notched up an EBIT of Rs.13 crore v/s loss of Rs.2 crore in previous Q2.