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Defying Odds: A Promising Future for Drone Manufacturing

DCM Shriram Industries

Current Market price on the date of Publishing this report-: 114 Rs

Important Note

  1. Cautionary Investment: The company’s foray into drone manufacturing offers bright prospects but also carries significant risks.
  2. Limited Information: The lack of transparency in the company’s defence segment and absence of management views raise concerns.
  3. Stock Price Surge: The recent significant rise in the company’s stock price may indicate potential fallback or stagnation before any upward movement.
  4. Extended Time Frame: Investors should be prepared for a longer timeframe to realize returns due to uncertainties surrounding the company’s prospects.
  5. No Buy/Sell Recommendations: Darkhorsetocks and its analysts do not provide buy or sell recommendations or target prices for the company’s stock, and will not be responsible for any losses incurred while investing.


Commencing its operations in 1990, DCM Shriram Industries Limited traces its roots back to the year 1889 when it originated as The Delhi Cloth & General Mills Company Limited. Over the course of a century, the company underwent significant developments and progress, closely mirroring India’s industrial growth. In 1989, the conglomerate underwent a restructuring phase and was divided into four separate companies through a Scheme of Arrangement. DCM Shriram Industries Limited emerged as one of these four entities, inheriting the rich legacy of the century-old DCM.

As a diversified group, DCM Shriram Industries Limited is involved in various sectors, including Sugar, Alcohol, Co-generation of Power, Organic and Inorganic Chemicals, Drug Intermediates, Industrial Fibres, and Engineering Projects related to Defence production—the most recent addition to its diverse portfolio. On 1st April 1990, the company officially commenced its operations, marking the beginning of a new chapter in its storied history.

Business products

The company has diversified its footprint across numerous industries, including

Sugar & Distillery

Established in the pre-independence era in the year 1932 at Daurala, a quaint village near Meerut on the New Delhi – Haridwar National Highway no. 58, Daurala Sugar Works stands as a pioneering force in the sugar industry. With its modern facilities, the company has earned the distinction of being the largest manufacturer of high purity Double Refined Sugar in the country. Additionally, the company boasts the capability to produce Country Liquor / IMFL on demand or under contract manufacturing arrangements.

Daurala Sugar Works’ product range is diverse and impressive. It specializes in manufacturing not only high purity Double Refined Sugar but also pharmaceutical-grade sugar, sugar cubes, sugar sachets, and expertly packaged crystal sugar, among various other offerings. With a rich history and a commitment to excellence, Daurala Sugar Works continues to be a prominent player in the sugar and related industries. Daurala Sugar works successfully Exported Sugar Quota of 43798 ton allocated to it for the sugar season 22- 23 till March 2023.

In a notable move, Daurala Sugar Works (DSW) has made a significant shift in its production process, transitioning from Sulphitation to Defco Remelt Phosphatation. This change has been coupled with diligent efforts to enhance process stability and promote energy conservation. The new process has been successfully implemented and is running smoothly.

During the fiscal year 22-23, DSW achieved a sugar production of 2.178 lakh MT by crushing 23.18 lakh MT of cane. However, the sugar recovery rate witnessed a slight dip, standing at 9.40%, after around 4 lakh Qtl. of sugar were diverted to B-Heavy molasses. The lower recovery rate can primarily be attributed to adverse weather conditions and an unexpected disease outbreak of top borer in the cane. Rest assured, DSW is taking proactive measures to tackle this issue effectively in the upcoming crop year, aiming to improve the sugar recovery and ensure a more robust production process going forward.

Under this segment, the company manufactures rectified alcohol, Extra Neutral Alcohol, and Anhydrous Alcohol. As the Distillery capacity has been increased last year, DSW’s Ethanol production capacity has also been increased and the Unit has produced 36359 KL of alcohol during FY 2022-23. The Central Government has laid down a target of 20% blending of Ethanol with petrol by 2025, which will give further fillip to the sector.

Rayons & Nylon

Company manufactures following products under this category


Tyre cord

Treated rayon fabric

Wicking and Non-wicking : Multi Filament Nylon 6 or Nylon 66 in Deniers 840 and 1260. To customer Specification. The Yarn for the chafer can also be sourced from customers approved yarn Vendor.


Pharma Intermediates

Daurala Chemicals and Organics is a subsidiary of the company specializing in manufacturing Fine Chemicals, Pharma Intermediaries, and offering Contract Manufacturing & Research services with a diverse portfolio of 30+ products. The company operates two integrated manufacturing plants, Daurala Sugar Complex and Daurala Organics, in Daurala, Meerut (U.P.). The sugar complex has a daily throughput of 12,500 TCS and a co-generation power plant with a capacity of 94 MW. Additionally, the organic/fine chemicals plant has a total installed capacity of 19,455 tonnes per annum as of FY21.

Leveraging its expertise in Cyanation, Optical Isomer separation, Racemisation, etc., Daurala Organics (DO) successfully developed key Pharma Intermediates in the Anti-Infective segment, serving as import substitutes and contributing to the country’s self-reliance in this critical sector. DO quickly established its leadership in the domestic market for these products and expanded its presence globally by collaborating with major pharmaceutical companies. Additionally, DO advanced its technology absorption to move up the value chain and manufacture state-of-the-art Statin Intermediates. The company also entered into Contract Manufacturing & Research partnerships with reputable multinational firms.

Fine Chemicals

In the early 1970s, the Fine Chemicals business commenced with a manufacturing facility in Daurala, specializing in Photochlorination of Toluene and Cyanation processes. Over time, the product portfolio expanded, incorporating various derivatives and co-products to cater to diverse industries such as Agrochemicals, Pharmaceuticals, Flavours & Fragrance, and Paints / Dyes.

With a strong foundation in Engineering expertise and efficient processes, the Fine Chemicals Business established a prominent presence in the domestic market. Now, it is further expanding its reach in the global market by forming partnerships with reputable multinational giants, solidifying its position as a key player in the industry.

Contract Manufacturing & Research

Daurala Organics ventured into contract manufacturing in 2012 and successfully completed process development. Presently, company is actively engaged in the commercial production of 2 statin intermediates on a contract basis for a reputable pharmaceutical multinational.

Moreover, company’s foray into contract research began in 2009, where company has been diligently working on 5 essential starting materials for various Active Pharmaceutical Ingredients (APIs). Company manufactures following chemicals

  • Anhydrous sodium sulphate
  • 2 Anhydrous soduim sulphate
  • 3 Carbon-di- sulphate

The Chemicals Businesses continued to thrive due to logistic constraints in China caused by Covid restrictions. The Company’s strategy emphasized optimizing sales realization through aggressive marketing of high-margin products. Despite higher input prices, effective cost reduction measures and investments resulted in improved operational efficiencies.


DCM Shriram Industries Limited (DSIL) has recently entered into Defence manufacturing as part of the ‘Make in India’ initiative. The company plans to establish a fully integrated facility to produce Defence Equipment for Defence and Homeland Security Organizations. DSIL has obtained Industrial Licenses from the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India, to manufacture Multi Role Armoured Vehicles, Unmanned Aerial Vehicles (UAVs), Communication Equipment, and Opto-Electronic Devices.

In its Defence manufacturing endeavors, DSIL has designed and manufactured advanced Multi Role Armoured Vehicles for the Indian Defence Forces. They offer high customizability and superior performance, making them suitable for offensive and defensive operations in various hostile environments.

Additionally, DSIL is engaged in the line manufacturing of Unmanned Aerial Vehicles, having developed two prototypes (DCM Trishul and DCM Kailash) for Surveillance and Heavy Lift requirements. These UAVs boast niche technology, aerodynamic shape, and rugged composite material, providing excellent speed, endurance, and crash resistance. Designed to meet the stringent operational requirements of Security Forces, they serve Defence and Commercial Applications alike. Company’s product portfolio includes

  • Armoured Vehicle
  • Unmanned Aerial Vehicle/Drone
  • Anti/ Counter Drone System


DCM Containers (DCM Hyundai Limited), a joint venture established in 1993 between DCM Shriram Industries Ltd., India, and Hyundai Mobis, Korea. DCM Shriram Industries is a prominent member of the DCM Shriram Group, with diversified business interests spanning Sugar, Alcohol, Rayon, Industrial Fibre, and Fine Chemicals. DCM Containers specializes in manufacturing all types of containers, making it a leading player in the industry.



For the Quarter ended Q4FY23

  • Net Sales: March 2023 – Rs. 534.72 crore (18.23% decline from March 2022 – Rs. 653.93 crore)
  • Quarterly Net Profit: March 2023 – Rs. 32.07 crore (97.72% increase from March 2022 – Rs. 16.22 crore)
  • EBITDA: March 2023 – Rs. 65.35 crore (62.72% growth from March 2022 – Rs. 40.16 crore)

For the year ended FY23

  • Net Sales: March 2023 – Rs. 2,351 crore (up 10.23% from March 2022 – Rs. 2,123 crore)
  • Net Profit: March 2023 – Rs. 60 crore (down 9% from March 2022 – Rs. 66 crore)
  • EBITDA: March 2023 – Rs. 142 crore (consistent with March 2022 – Rs. 142 crore)
  • Debt Reduction: Company reduced debt by around 50 crores in the last FY.
  • ROCE (Return on Capital Employed): Maintained consistent ROCE of 10% over the last several years.

Management’s comments

DCM Shriram Industries Limited (DSIL) is making strides in the Defence Equipment Manufacturing industry, with its products being well-received by defence and police forces. The Armoured Vehicle project, in collaboration with Ford Motor Company, USA, is back on track. DSIL has also invested in Zyrone Dynamics, Turkiye, and is progressing well in the development of UAV platforms. Additionally, DSIL has signed an MOU with Skylock, Israel, for Counter Drone Systems. The company aims to aggressively pursue sales in India and abroad, showcasing its viable products to potential customers.

Sectorial Outlook


The global sugar market is experiencing growth, with consumption expected to reach 189.50 million tons by 2028. Developed economies show saturated demand, while emerging regions like India, China, and the Middle East are witnessing strong growth due to rising disposable income and changing food habits. India is estimated to produce 33 million tons of sugar in the current season, with 6 million tons allowed for export. The government’s export policy aims to stabilize sugar prices, support farmers, and reduce working capital costs for mills. Emphasis is also on ethanol production to reduce fuel imports and promote renewable energy. The government has provided support to sugar mills through interest subvention and timely initiatives, enabling the sector to become self-sustaining. Measures like diverting sugar to ethanol production and encouraging exports benefit millions of sugarcane farmers and workers, fostering growth in the sugar industry. India’s sugar export for Sugar Season 2022-23 was set at 6 million tons, reduced from the all-time high of 11 million tons in the previous season. However, higher domestic and export prices of sugar and ethanol are expected to support revenue growth in the sugar industry over the medium term. Despite regulations, the sugar sector’s outlook remains stable due to reduced working capital requirements from lower inventory, increased ethanol volumes, and a 3% rise in ethanol realizations. Integrated sugar players have a more favorable position compared to non-integrated ones, despite profitability pressures. Government initiatives, including diverting sugar to ethanol production and encouraging exports, benefit sugarcane farmers, mill workers, and the entire sugar industry ecosystem, fostering sustainable growth.


Shriram Rayons achieved record sales turnover and profits during the year due to increased sales realization and cost reduction measures. However, export volumes suffered in the second and third quarters of FY 2022-23 due to reduced production by European customers amid the Russia-Ukraine War and global recessionary trends. The Unit faced challenges in FY 2020-21 and 2021-22 due to recessionary economic conditions and the Covid-19 pandemic, leading to downward volume trends. Adverse global demand-supply situations affected input prices, but the Unit managed to offset them with improved sales realization. Despite delays caused by market conditions and Covid-19 restrictions, the Unit’s capacity expansion project for Rayon is nearing completion. It also saw higher sales and improved operating margins in Nylon Chafer fabric and Carbon Disulphide. The Unit prioritizes agro fuel usage to control energy costs and aims to adopt further energy conservation measures. It has received numerous awards and appreciation for productivity, exports, technical textiles, energy conservation, safety, and being a top employer.


Despite volatile input prices driven by rising global energy costs, the Company performed well by focusing on increasing sales realization and improving energy efficiency through enhanced operational efficiencies and cost control. The Company also prioritized debottle necking and process optimization to capitalize on market opportunities.


With a legacy of more than 130 years, DCM Shriram Industries Limited has a remarkable history deeply intertwined with India’s industrial progress. From its inception as The Delhi Cloth & General Mills Company Limited in 1889 to its current avatar as DSIL, the company has evolved and diversified, mirroring the growth of the nation. Today, DSIL stands at the forefront of Defence manufacturing, embracing the ‘Make in India’ initiative with a fully integrated facility aimed at producing cutting-edge Defence Equipment. Its advanced Multi Role Armoured Vehicles and Unmanned Aerial Vehicles demonstrate the company’s commitment to delivering high-performance solutions for the Indian Defence Forces, while also exploring opportunities in the global market. As DSIL continues to build on its century-old legacy, it remains committed to excellence, innovation, and contributing to India’s journey towards self-reliance in Defence and Homeland Security. With a focus on advanced technology, customization, and superior performance, DSIL is poised to make a significant impact in the Defence manufacturing sector, both nationally and internationally.

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