The shares of this smallcap company jumped around 4 percent in Wednesday’s trading session after receiving an order worth Rs. 187 crores from an overseas customer.
Price Movement:
With a market capitalization of Rs. 3,814 crores, the shares of DCX Systems Ltd started Wednesday’s trading session on a higher note at Rs. 332.45 compared to its previous close of Rs. 329.45. During the trading session, the shares hit a high of Rs. 344, gaining around 4 percent and are currently trading at Rs. 341 apiece.
What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that it had secured an order from an international entity for the supply of Electronic Kits worth USD 22,323,200 equivalent to about Rs. 187.29 crores. The order is said to be executed within 12 months.
The contract provides a significant boost to the company’s international business. As per reports, DCX Systems will produce the electronic kits at its facility in the Aerospace SEZ Sector in Bengaluru.
Financials:
Looking at the company’s financial statements, the revenue decreased by around 82 percent from Rs. 746.20 crores during the March quarter to Rs. 138.08 crores in the June quarter. On the other hand, the net profits declined by around 91 percent from Rs. 32.95 crores to Rs. 2.94 crores during the same timeframe.
Order Book:
As of June 30th, 2024, the company has a robust order book of Rs. 1,937 crores, with a robust pipeline that is expected to drive future growth.
Customer Base:
DCX Systems has a diverse customer base that includes major domestic and international defence and aerospace companies, including Elta Systems, Israel Aerospace Industries, Bharat Electronics, and several other prominent Indian and multinational corporations.
Future Outlook:
DCX Systems further plans to improve its supply chain efficiency, and cost efficiency, with better profit margins by focusing on new verticals like Make in India, JVs and Transfer of Technology (ToT).
Furthermore, the company is focused on diversifying its revenue streams beyond system integration, with expectations of increased contributions from cable, PCBA, and kitting services.
Additionally, the company is actively pursuing opportunities in the domestic market, particularly with Indian Railways for the obstacle detection system.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 6.72 percent and a return on capital employed (RoCE) of 10.83 percent for the period spanning FY23-24. Further, the net profit margin during FY23-24 was at 5.32 percent.
Company Profile:
Headquartered in Bengaluru, DCX Systems Limited is primarily engaged in system integration and manufacturing a comprehensive array of cables and wire harness assemblies for the aerospace and defence industries.
Written By Vaibhav Patil
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