1. At a Glance
DCI, the GOAT of India’s dredging industry, claims over 80% market share in maintenance dredging at major ports. Yet despite holding this monopoly, it still manages to lose money, struggle with working capital, and post negative ROE. PSU privilege, baby. From a 52-week high of ₹1,458, it now trades at ₹701. Is the ship sailing or sinking?
2. 💥 Hook — DCI: The Monopoly That Couldn’t
What do you get when a company:
- Controls 80% of a critical sector (dredging),
- Has zero listed competitors with serious scale,
- Works with Indian ports and Navy,
- And still delivers a negative ROE of -3.59%?
You get Dredging Corporation of India Ltd — a monopoly PSU that defies the laws of capitalism.
Imagine owning 80% of India’s pizza market and still forgetting to turn on the oven. That’s DCI.
3. 🛥️ WTF Do They Even Do?
- DCI is in the business of dredging — removing sediments from ports, rivers, and seabeds.
- Their clients: Major ports, Indian Navy, and other maritime agencies.
- Primary revenue driver: Maintenance dredging contracts.
- Assets include: Cutter suction dredgers, trailer suction hopper dredgers, grab dredgers — basically underwater bulldozers.
📌 In short: They clean the ocean floor so ships can pass. It’s not glamorous, but it’s crucial.
4. 💰 Financials – Profits, Margins, ROE, Growth
Here’s the crime scene:
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹1,165 Cr | ₹946 Cr | ₹1,142 Cr |
| Operating Profit | ₹-19 Cr | ₹204 Cr | ₹140 Cr |
| Net Profit | ₹-196 Cr | ₹36 Cr | ₹-27 Cr |
| OPM | -2% | 22% | 12% |
| ROE | -16% | 2.9% | -3.6% |
🧠 What is even going on?
- Massive volatility. FY23 was a disaster (loss of ₹196 Cr), FY24 was okay-ish, and FY25 went red again.
- ROCE hovers around 0% to negative territory.
- EPS is a rollercoaster: from -₹70 to ₹12.74 to -₹9.81 in 3 years.
5. 📉 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹701
- Book Value: ₹436 → P/B = 1.61x
- P/E = Undefined (because loss-making)
🧾 Fair Value Range (Based on P/B and asset-heavy PSU comps):
| Scenario | Implied FV | Rationale |
|---|---|---|
| Base (1.2x BV) | ₹525 | Reflects infra PSU valuation, no growth |
| Bull (1.5x BV) | ₹650 | On revival hopes and margin stability |
| Crack (2x BV) | ₹870 | Only if privatization or giant order inflows |
🎯 FV Range: ₹525 – ₹650 (with ₹870 reserved for PSU delusion or if Modi launches underwater bullet trains)
6. 🍿 What’s Cooking – News, Triggers, Drama
- New independent directors appointed (July 2025) — post-retirement sarkari jobs, y’all.
- FY25 showed slight profitability in Q4 (₹21 Cr), but overall the year still ended in red.
- Order wins remain lumpy — zero revenue predictability.
- Capitalizing interest costs? Screener throws shade here.
- Privatization rumors have floated for years. Never materialized.
🚨 No major catalysts visible short-term. Just PSU hopes and budget speeches.
7. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Year | Borrowings (₹ Cr) | Reserves (₹ Cr) | Net Block (₹ Cr) |
|---|---|---|---|
| FY22 | ₹273 | ₹1,379 | ₹1,580 |
| FY24 | ₹426 | ₹1,236 | ₹1,438 |
| FY25 | ₹923 | ₹1,193 | ₹1,343 |
📉 Borrowings more than tripled in 2 years. For what? Mystery.
- Negative equity growth.
- Fixed assets declining — no major capex, yet debt balloons.
🧯 Leverage is creeping up dangerously for a PSU with erratic cash flows.
8. 💵 Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| 2023 | ₹148 Cr | ₹-173 Cr | ₹-38 Cr | ₹-63 Cr |
| 2024 | ₹191 Cr | ₹-290 Cr | ₹118 Cr | ₹19 Cr |
| 2025 | ₹112 Cr | ₹-477 Cr | ₹363 Cr | ₹-2 Cr |
🚱 Operating cash flow is shrinking.
🚨 Investing cash flow is highly negative — driven by what? New dredgers? No disclosure.
💣 Massive financing inflows — indicates borrowing to stay afloat.
This is not the cash flow of a “stable infra PSU”. This is a rescue attempt.
9. 📐 Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | -16% | 2.9% | -3.6% |
| ROCE | -10% | 4% | -0.32% |
| Interest Coverage | <1 | Just above 1 | Barely 1 |
| Debtor Days | 84 | 68 | 81 |
| Working Capital Days | -46 | -44 | 62 |
📌 The ratios scream “capital inefficiency”.
- Working capital suddenly exploded in FY25.
- ROCE hasn’t crossed 4% in 10 years.
- This is PSU deadwood, not a lean infra machine.
10. 📊 P&L Breakdown – Show Me the Money
Latest Quarterly (Mar 2025):
- Sales: ₹462 Cr (up from ₹324 Cr QoQ)
- EBITDA: ₹77 Cr
- Net Profit: ₹21 Cr
- OPM: 17% (recovering after 2 horrible quarters)
🎢 YoY TTM profit growth: -222% — yes, negative triple digits.
If anything, FY26 depends on one thing: Can they convert ₹400 Cr+ quarters without eating ₹500 Cr+ expenses?
11. 🥊 Peer Comparison – Who Else in the Game?
| Company | CMP | P/E | ROCE | ROE | Market Cap |
|---|---|---|---|---|---|
| DCI | ₹701 | NA | -0.32% | -3.59% | ₹1,963 Cr |
| Knowledge Marine | ₹1,646 | 35.87 | 25.8% | 8.18% | ₹1,779 Cr |
🧠 Insight:
- Knowledge Marine is the new-age, leaner, profitable version of what DCI should have become.
- Both have similar market caps — one bleeds cash, the other prints it.
12. 🧬 Misc – Shareholding, Promoters, KMPs
- Promoter Holding: 73.47% (unchanged for years)
- Public Holding: 19.40% (steady decline)
- FIIs: Just 0.45% – they know better
- No major institutional interest
- Recent changes in independent directors (July 2025)
🫡 Key personnel: Bureaucratic shuffle room. KMPs aren’t market-facing or visionary. Mostly retired naval or port officials.
13. ⚖️ EduInvesting Verdict™
“A dredging monopoly so deep, even its profits are buried underwater.”
- DCI is a textbook PSU: monopoly on paper, inefficiency in practice.
- Financials are improving slowly but remain fragile.
- No dividend, no ROE, and ballooning debt.
🎯 FV Range: ₹525 – ₹650
Only buy this if:
- You love PSU budget speeches.
- You expect a divestment miracle.
- You’re short on excitement in life and like quarterly profit shocks.
Otherwise? Just track for infra trends and Knowledge Marine drama.
✍️ Written by Prashant | 📅 5 July 2025
Tags: DCI, Dredging Corporation of India, Infra PSU, Knowledge Marine, Shipping Stocks, PSU Analysis, EduInvesting, Maritime Stocks
