CMP 370. TP 750

_Combo of Sugar, TyreCord, Fine Chemicals, API_

DCM SHRIRAM *IND* LTD
BseCode 523369 (10FV)

Rationale for Recommendation:

1. Diversified Product range
2. Highly profitable Boom in All divisions
3. *9m EPS 55.36*
4. *FY17E EPS 77*
5. *FY18EEPS 84*

DSIL is diversified conglomerate engaged in production of SUGAR, TYRECORD, API, FINE CHEMICALS

A. _Daurala Sugar_ : One of the oldest sugar Mills and well-known name in U.P., sugar factory produces Premium Packages Sugar, Sugar Cubes, Sugar Sachets and Pharma grade Sugar. Also has 45000 KL distillery to produce Liquor, ENA

B. _Shriram Rayon's_ : Again one of the oldest and most well known name in Tyre industry, produces Rayon Tyre Yarn/Cord/Fabrics and Nylon yarn
C. _Daurala Organics_: This division produces Organic/Inorganic Chemicals and Drug Intermediates

          9mFY17.  FY16

Sales.   1121.    1216

PBT.        125.         38

PAT.         96.           33

Equity.    17.40

EPS Rs *55.36.  19.10*

DSIL reported exceptionally good nos for 9mFY17 with NP of 96.33cr vs 9.26cr. Such performance was possible not only due to boom in sugar prices but TYRECORD division too performed much better due to robust demand from tyre industry and improved performance of Chemicals. In fact, *tyre cord industry has become seller mkt with strong pricing power*

_Finance cost is just 2% of Sales which should come down further with increased earnings_

          FY17E. FY18E

Sales.  1400.   1550

NP.        134.     146

EPSRs.    77.      84

DSIL is available at extremely attractive Valuations:

1) *Tdg @ 4.80xFY17Eeps*

2) *Avlbl @ 4.40xFY18Eeps*

Even if DSIL gets modest PERATIO of 10, stock should be 750

( *We repeat Bse code no is  523369*)