CMP: ₹336.50 | FY25 PAT: ₹38.88 Cr | Order Book: ₹2,855 Cr | Recent Wins: Lockheed Martin, ELTA | Sector: Defence Electronics
🚀 At a Glance
DCX Systems Ltd, the Bengaluru-based defence electronics firm, reported a 48.7% drop in FY25 net profit to ₹38.88 Cr. Revenues also fell by nearly 24% to ₹1,083.67 Cr. But investors didn’t panic — the stock rose nearly 2% today.
Why?
Because DCX’s order book stands at a missile-sized ₹2,855 Cr — with massive new contracts from Lockheed Martin, ELTA Systems, and the Indian defence ecosystem.
🧾 FY25 Financial Summary
| Metric | FY25 | FY24 | YoY Change |
|---|---|---|---|
| Revenue | ₹1,083.67 Cr | ₹1,423.58 Cr | 🔻 -23.88% |
| EBIT | ₹71.27 Cr | ₹124.41 Cr | 🔻 -42.71% |
| EBIT Margin | 6.58% | 8.74% | 🔻 -216 bps |
| PAT | ₹38.88 Cr | ₹75.78 Cr | 🔻 -48.69% |
| PAT Margin | 3.59% | 5.32% | 🔻 -173 bps |
| Order Book | ₹2,855 Cr | ₹2,000 Cr* | 🔺 +42% YoY |
📉 *Estimated based on company trajectory
Yes, revenues and margins got hit. But future cashflows? Locked and loaded.
🛠️ Order Wins Fuel the Pipeline
| Client | Project Description | Order Size |
|---|---|---|
| Lockheed Martin USA | Electronic assemblies (2 orders) | ₹839.97 Cr |
| ELTA Systems (Israel) | Close-in Weapon System modules | ₹483 Cr |
| ELTA Systems JV | Radar systems for airborne & land (JV signed) | TBD |
| Backplane Modules | Module assembly for global OEM | ₹19.3 Cr |
That’s over ₹1,342 Cr in fresh orders in just 6 months. That’s more than 100% of FY25 revenue booked after March.
💡 EduInvesting Take
DCX Systems is the rare Indian defence stock where falling profits = rising confidence.
Here’s why:
- 🛩️ Repeat orders from Lockheed Martin — tells you DCX’s quality passes global defence standards
- 🇮🇱 JV with ELTA (Israel Aerospace) = Strong Make in India play + tech transfer
- 🏭 New DTA facility = additional capacity, margin uplift ahead
- 📦 ₹2,855 Cr order book = 2.5x revenue cover → better visibility than a DRDO radar
Sure, PAT halved — but in defence manufacturing, it’s not about this quarter’s earnings. It’s about next 8 quarters of execution.
⚔️ Key Segments
| Business Line | Description |
|---|---|
| Cable & Wire Harnesses | For aerospace, defence, radar systems |
| PCB Assembly (via Raneal) | Hi-spec circuits for avionics & comms |
| Electronic Sub-Systems | Weapon control, radar interfaces |
| Offset Programs | Major Indian Offset Partner for ELTA & IAI |
🔮 Strategic Outlook
- 📡 DTA unit launching soon = higher throughput
- 📈 Expect operational leverage as volumes scale
- 🛡️ Make in India policy tailwinds will help margin restoration
- ✈️ US + Israel clients = low risk of receivables default
📊 Valuation Lens
| Metric | Value |
|---|---|
| TTM EPS | ₹12.85 |
| CMP | ₹336.50 |
| PE Ratio | ~26x |
| Order Book | ₹2,855 Cr |
| Revenue Visibility | 2.5–3 years |
Valuation isn’t cheap. But for a Make-in-India defence play with high stickiness and export contracts? Arguably justified.
🧨 Risks & Red Flags
- FY25 margin deterioration must reverse in FY26
- Heavy dependency on a few large defence OEMs
- Global geo-political delays (e.g. Israel, US shifts) may impact inflow
- Execution challenges if DTA unit gets delayed
🏁 Final Word
This isn’t a tech IPO pretending to be defence — this is real cables, real circuits, and real missile systems.
DCX’s PAT fell 49%, and the stock still went up.
Why? Because everyone sees what’s coming:
- ₹800+ Cr from Lockheed
- ₹500+ Cr from ELTA
- A pipeline that makes FY25 look like a temporary pause
If execution improves, DCX may quietly become India’s first ₹10,000 Cr market cap SME defence exporter.
🗓️ Published: May 28, 2025
✍️ By: Prashant Marathe
Tags: DCX FY25 Results, Lockheed Martin India Offset, ELTA JV, Defence Order Book ₹2855 Cr, Bengaluru Defence Electronics, NSE DCXINDIA, EduInvesting
