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DRChoksey Research Report
The first quarter has always been a lackluster quarter for DCX systems Ltd., and it was no exception this time. However, Raneal Advanced Systems (PCBA Arm of DCX) delivered a revenue of Rs 424 million. At the same time NIART Systems (Railway JV) has geared up and is ready for mass production with assets of Rs 4,752 million.
Operationally, DCX Systems saw a 19% YoY revenue decline to Rs 1,381 million, due to a traditionally slow Q1. Rising material costs led to an operating loss of INR 48 million and net profit dropped 69% YoY to Rs 29 million. However, we believe healthy recovery is expected from customers against the increase raw material prices under the BOM guarantee.
We maintain our 'Buy' rating due to a strong order book of Rs 19,370 million, a healthy order pipeline in cable and wire harnessing and system integration, and a positively evolving mix of system integration and non-system integration businesses, supported by the strong potential lying with NIART Systems.
We also maintain our target price of Rs 519, based on a price to earning multiple of 36 times on FY26 earning per share.
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