🟢 1. At a Glance
DCM Ltd is one of those legacy conglomerates that survived partition, liberalization, and now thrives on other income. From grey iron castings to AI-ML services to a real estate project suspended by the Haryana government — it’s like three different industries glued together with financial jugaad. ROCE is sky-high at 79%, but revenue hasn’t moved in years.
🎬 2. Introduction with Hook
“Grey iron castings are boring,” you say.
“Cloud computing and NLP are the future,” you say.
“Real estate is dead,” you say.
DCM Ltd replies: “Why not… all three?”
This 1977-incorporated company has:
- A ₹236 Cr market cap
- Negative operating margins in some quarters
- ₹28 Cr in “other income”
- And an HRERA-suspended housing project in Hisar
And still, stock is up 35% in 1 year.
Let’s decode this vintage transformer of Indian business.
🏭 3. Business Model – WTF Do They Even Do?
🧱 Division 1 – Engineering / Castings
- Through DCM Engineering Ltd (wholly owned)
- Makes grey iron castings for auto clients
- Products: Cylinder heads, blocks, housings
- Legacy, stable, capital intensive
🏗️ Division 2 – Real Estate
- 68-acre land in Hisar (Haryana)
- Project launched under Deen Dayal Jan Awas Yojna
- Licence suspended by DTCP in April 2023
- Status: Under appeal; development halted
🧑💻 Division 3 – IT & Cloud Services
- Operated via DCM Infotech Ltd
- Provides services in cloud, networking, analytics, and AI/ML/RPA/NLP (literally all the trending acronyms)
Basically: Steel, Cement, and SaaS — all in one NSE ticker.
💰 4. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 69 | 71 | 69 |
| Operating Profit (₹ Cr) | 1 | 3 | 3 |
| Other Income (₹ Cr) | 13 | 11 | 28 |
| Net Profit (₹ Cr) | 2 | 5 | 22 |
| ROCE | 26% | 50% | 79% |
| ROE | – | 2.8% | 68.8% |
⚠️ Core biz = barely profitable
📈 Profit = driven by “Other Income” (mostly investment returns, maybe asset sales)
📉 Sales have been stuck around ₹70 Cr since 2020
📉 5. Valuation – Is It Cheap, Meh, or Crack?
- 📌 CMP: ₹127
- 📌 EPS (TTM): ₹11.72
- 📌 P/E: 10.8x
- 📌 Book Value: ₹23 → P/B: 5.52x
- 📌 ROE: 68.8%
🧮 Fair Value Range (EduCalc™):
| Basis | Valuation ₹ |
|---|---|
| 10x EPS | ₹117 |
| 15x EPS | ₹176 |
| 12x EPS Avg | ₹140 |
🎯 FV Range = ₹120 – ₹140
Stock is currently in its fair value zone — but only if other income sustains.
🧨 6. What’s Cooking – News, Triggers, Drama
- 🛑 Hisar Project Suspended: April 2023 DTCP order bans all 3rd party rights, construction
- 💻 Tech Buzzwords Flying: “AI, RPA, NLP, Cloud” — all mentioned in DCM Infotech’s page. No revenue disclosed separately though
- 🔁 Promoter Holding Up: From 48.54% to 49.64%
- 🪙 No Dividend, No Plans: Despite profits
- 🚀 Stock up 35% in 1 year — momentum driven?
Plot twist: core business is boring, but ROE is spicy, and promoters aren’t selling. Confusing combo.
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹19 Cr | ₹19 Cr | ₹19 Cr |
| Reserves | ₹-4 Cr | ₹2 Cr | ₹24 Cr |
| Borrowings | ₹1 Cr | ₹2 Cr | ₹1 Cr |
| Fixed Assets | ₹35 Cr | ₹34 Cr | ₹31 Cr |
| Investments | ₹12 Cr | ₹11 Cr | ₹24 Cr |
| Other Assets | ₹68 Cr | ₹69 Cr | ₹70 Cr |
✅ Debt negligible
🔁 Net worth has rebounded after years of losses
⚠️ Still under ₹125 Cr balance sheet size
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | FCF? | Commentary |
|---|---|---|---|
| FY23 | ₹18 Cr | ✅ | Operational recovery |
| FY24 | ₹3 Cr | Meh | Lower conversion |
| FY25 | ₹1 Cr | ❌ | Weak core ops; rest is non-cash |
This isn’t a cash cow — it’s more like a cash meh.
📐 9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 26% | 50% | 79% |
| ROE | – | 2.8% | 68.8% |
| OPM | 2% | 5% | 4% |
| CCC (Days) | 78 | 82 | 75 |
| Working Cap Days | -155 | -165 | -177 |
📌 Metrics improving — but that’s mostly due to low capex + high other income
📌 Working capital days negative = good (probably due to payables)
📊 10. P&L Breakdown – Show Me the Money
- FY25 Revenue = ₹69 Cr
- Operating Profit = ₹3 Cr (4% OPM)
- Other Income = ₹28 Cr (!!!)
- Net Profit = ₹22 Cr
- EPS = ₹11.72
So basically: Without “Other Income”, P&L is a flatline.
🥊 11. Peer Comparison – Who Else in the Game?
No direct peers — but here’s a context vs IT cast:
| Peer | P/E | ROCE | OPM % | Sales (Cr) | MCap (₹ Cr) |
|---|---|---|---|---|---|
| Cyient | 23x | 16.6% | 15.4% | ₹7,360 Cr | ₹14,373 Cr |
| Netweb Technologies | 89x | 32.5% | 13.9% | ₹1,149 Cr | ₹10,278 Cr |
| DCM Ltd | 10.8x | 79.3% | 4.0% | ₹69 Cr | ₹236 Cr |
⚠️ DCM isn’t a tech stock. Nor a manufacturing major. It’s a finance-fueled, one-foot-in-each-world machine.
🧬 12. Miscellaneous – Shareholding, Promoters
| Holder | Jun ’23 | Mar ’25 |
|---|---|---|
| Promoters | 48.54% | 49.64% |
| FIIs | 0.00% | 0.00% |
| DIIs | 3.67% | 3.36% |
| Public | 47.77% | 47.01% |
| No. of Shareholders | 24k+ steady base |
📌 Promoter creep up
📌 No major FII/DII love — still a value retail play
🧑⚖️ 13. EduInvesting Verdict™
DCM Ltd is the ultimate shape-shifter:
✅ Grey iron + legacy assets = value base
✅ Cloud/AIML buzz = narrative trigger
✅ ROE & ROCE look god-tier… but it’s “other income” magic
❌ No real sales growth
❌ Real estate project stuck in regulatory freeze
FV Range: ₹120 – ₹140
At ₹127 — it’s riding the upper band of optimism.
Would you pay 10x for a 3-legged business chair?
Only if you believe in its next act: DCM Web 3.0.
✍️ Written by Prashant | 📅 10 July 2025
Tags: dcm ltd, grey iron casting, dcm engineering, dcm infotech, real estate suspended project, dtcp haryana, iron auto parts india, sme tech stocks, multibusiness company india, fair value
