📌 At a glance
Deccan Transcon Leasing Ltd (DECCANTRAN) posted a consolidated net profit of ₹1,181.89 lakh in FY25, a strong leap from ₹618.35 lakh in FY24. Revenue touched ₹16,660.67 lakh, boosted by its shipping and freight arms. But investors are worried — despite the profit, the company recorded a cash flow from operations of -₹1,548.85 lakh, a massive burn. With a foreign subsidiary hauling in over ₹100 Cr revenue and losses from associates still being certified manually, this isn’t just logistics — it’s financial gymnastics.
🏢 About the Company
- Name: Deccan Transcon Leasing Ltd (formerly Deccan Transcon Leasing Pvt Ltd)
- CIN: U63090TG2007PLC052599
- Listing: NSE SME (Symbol: DECCANTRAN)
- Sector: Logistics, Shipping, and Leasing
- Headquarters: Hyderabad, Telangana
- Group Entities:
- Deccan Shipping & Logistics SDN BHD (Malaysia)
- King Star Freight Pvt Ltd (India)
- One Associate (unnamed)
🧑💼 Key Personnel
- Director: Jaidev Menon (DIN: 07020583)
- Compliance Officer: Khushboo Gautam (M. No.: A66993)
- Statutory Auditors: ADV & Associates (FRN: 128045W) — issued unmodified audit opinions on both standalone and consolidated results
📊 Financial Snapshot – Consolidated FY25 vs FY24
| Metric | FY25 (₹ Lakh) | FY24 (₹ Lakh) | Change (%) |
|---|---|---|---|
| Total Revenue | 16,660.67 | 15,363.76 | +8.4% |
| Total Expenses | 15,363.76 | 13,951.46 | +10.1% |
| EBITDA (approx) | 1,412.30 | 1,412.30 | Flat |
| Profit Before Tax (PBT) | 1,540.62 | 731.82 | +110.5% |
| Profit After Tax (PAT) | 1,181.89 | 618.35 | +91.1% |
| EPS (Approx) | Not specified | — | — |
💥 That’s a 91% net profit surge…
💧 But the company still lost ₹1,548.85 lakh in operational cash.
🧮 Forward-Looking Fair Value Estimate
Assume a transport & logistics sector P/E of 12× on FY25 earnings:
FV = ₹11.81/share × 12 = ₹141.72
💸 CMP = ₹44.00 (as of May 29, 2025)
📈 Trading at ~31% of FV — valuation mismatch or cash flow red flag?
🪙 Cash Flow Statement – FY25 (Consolidated)
| Segment | FY25 (₹ Lakh) | FY24 (₹ Lakh) |
|---|---|---|
| Cash from Operating | -1,548.85 | +72.00 |
| Cash from Investing | -4,254.80 | -623.09 |
| Cash from Financing | +5,928.41 | +507.07 |
| Net Cash Change | +124.77 | -44.03 |
| Closing Cash Balance | ₹431.06 | ₹306.29 |
Takeaway: They’re burning operational cash but surviving off financing inflows. Think less “profitable business” and more “working capital circus”.
🧾 Balance Sheet (Consolidated Snapshot)
| Metric | FY25 (₹ Lakh) | FY24 (₹ Lakh) |
|---|---|---|
| Total Assets | 15,098.55 | 7,721.58 |
| Equity Capital | Not disclosed | — |
| Fixed Assets | Not disclosed | — |
| Minority Interest | Present | Present |
🧩 Financials lack proper granularity — no detailed itemization of asset classes.
🌍 Subsidiary Performance – Deccan Shipping & King Star Freight
- Deccan Shipping (Malaysia):
- Assets: ₹5,550.80 L
- Revenue: ₹10,936.64 L
- Audit: Done by K Indra & Associates
- ✅ Impressive scale
- King Star Freight (India): Consolidated, but not broken down separately.
- Associate Entity: Certified only by management — no third-party audit.
📛 Shady alert: How much is it contributing? Unknown.
🔍 Audit Findings & Disclosures
- Clean audit opinion ✅
- Emphasis of matter on:
- Foreign subsidiary results being based on separate audit
- Associate company results being certified, not audited
- Profit certified, but cash burn clearly visible
- Going concern basis assumed despite negative op cash flow
🧠 EduInvesting Take
“This isn’t just logistics — this is financial logistics.”
While Deccan Transcon’s P&L looks fabulous, the cash flow looks fraudulent (figuratively speaking). You can’t drive a container ship with optimism alone. This company is borrowing to survive, not profiting to thrive.
The big Malaysian unit is doing the heavy lifting, but the associate remains mysterious. Combine that with rising costs and opaque disclosures… and it’s not surprising that the stock slid 2% today to ₹44.00, even after declaring bumper results.
⚠️ Risks & Red Flags
- 🧾 Unclear Asset Breakdown: No full asset-liability mapping
- 🧯 Huge Cash Burn: Negative operating cash every year
- 🕵️♂️ Associate Company = Black Hole (Management-certified only)
- 🌍 Foreign Subsidiary Dependency: Over 65% revenue contribution
- 🧊 Heavy Financing Dependence: ₹59 Cr inflow from borrowings
🧮 Summary
| ✅ Positives | ❌ Concerns |
|---|---|
| High YoY profit growth | Operational cash loss of ₹15.4 Cr |
| Foreign subsidiary performing well | Associate result unaudited |
| Clean auditor opinion | Disproportionate asset growth |
| Revenue up 8.4% YoY | Financing-heavy survival model |
🎯 Final Verdict
Deccan Transcon is running on paper profits and actual debt. Unless they stop bleeding cash and fix audit transparency issues, even ₹1,181 lakh profit won’t save them from a liquidity collision.
Author: Prashant Marathe
Date: 29 May 2025
Tags: Deccan Transcon Leasing, FY25 Results, Logistics Stocks, NSE SME, Deccan Shipping, Cash Flow Red Flags, EduInvesting, ADV & Associates, Prashant Marathe
