DCX Systems Set For A Booming Upside; Says PL Capital; Here's Why

PL Capital Report

In this edition, we are putting the spotlight on DCX Systems Ltd., a company catering to the high standards of precision engineering required in defence and aerospace industries. DCX Systems is a company engaged in the system integration of electronic systems and subsystems, along with allied products such as Printed Circuit Board Assemblies and cable and wire harnessing.

The shift from import to "Make in India," the tightening of offset policies, the expansion into new geographies and customer acquisition, the successful implementation of backward integration for PCBAs, and the promising prospects of the obstacle detection solution in the Indian Railways have positioned DCX favorably.

On December 31, 2023, the order book stood at Rs 1095 crore. Execution during the three quarters following December 2023 amounted to Rs 1079.90 crore. As of December 31, 2024, the current order book exceeds Rs 3000 crore.

For FY26, we are projecting revenue of Rs 1900 crore. Current market cap is roughly Rs 4000 crore, with cash of Rs 980 crore in balance sheet. Hence, the stock is trading at FY26 market cap/sales of 2.1 times whereas industry average is around 10 times, and enterprise value/sales of 1.60 times.

We have a target price of Rs 535 on the stock, anticipating an upside of 49%.

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