Investor enthusiasm drove a 15 percent surge in DCX Systems’ stock, reaching Rs 304 on October 31, following the announcement of the company’s remarkable performance in the September quarter of the current fiscal year. DCX Systems reported a net profit of Rs 20 crore, more than doubling its earnings.
During this period, the S&P BSE Sensex remained stable at 64,085 levels, with the surge in DCX Systems’ stock attracting significant attention. Trading data indicated a substantial increase in activity, with approximately 1.5 million equity shares exchanged on both BSE and NSE, surpassing the one-month average of 0.4 million equity shares.
Over the past six months, DCX Systems’ stock, a wire and cable manufacturer, has experienced a remarkable 46 percent increase, outperforming the Sensex benchmark’s 4 percent rise.
DCX Systems reported a substantial 77 percent year-on-year growth in revenue, reaching Rs 309 crore in Q2FY24, compared to Rs 173 crore in the previous year. This impressive growth was attributed to the successful execution of the company’s order book.
As of September, the order book for DCX Systems had a value of Rs 1,258 crore. The company’s earnings before interest and tax (EBIT) also exhibited remarkable growth, increasing by 93 percent year-on-year to reach Rs 30 crore in Q2FY24, up from Rs 15 crore in Q2FY23.
Furthermore, the EBIT margins for the quarter expanded by 100 basis points (bps) to reach 10 percent in Q2FY24. This improvement was credited to enhanced operational efficiency and supply chain measures.
HS Raghavendra Rao, Chairman & Managing Director of DCX Systems, expressed optimism about the future, stating, “We have a healthy and strong order book which gives an optimistic outlook for the near future. Our focus remains on securing raw materials to support the anticipated growth and rationalizing expenses to improve operational efficiencies.”
DCX Systems is a prominent player in the Indian defense manufacturing sector, providing comprehensive services and manufacturing of electronic sub-systems, cable, and wire harness assemblies for both domestic and international clients. The company initiated its operations in 2011 and has been a preferred Indian Offset Partner (IOP) for foreign original equipment manufacturers (OEMs) involved in defense manufacturing projects.
In terms of ownership, foreign institutional investors (FIIs) reduced their holdings from 0.6 percent in the June-ended quarter to 0.07 percent in the September-ended quarter. Institutional investors also decreased their holdings, dropping to 8.2 percent in September 2023 from 9.9 percent in June 2023. However, mutual funds increased their holdings, reaching 3.62 percent in the September-ended quarter, up from 3.3 percent in the previous quarter.