DCM Limited

Industrials — Metal Fabrication · NSE

₹71.50+₹0.30 (+0.42%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

The 60-second version of DCM Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

DCM Limited, together with its subsidiaries, provides information technology (IT) infrastructure services in India and internationally. It operates through Real Estate, Grey Iron Casting, IT Services, and Others segments.

IndustryMetal Fabrication

SectorIndustrials

Employees218

Annual revenue₹72 Cr

How does it make money?

Turns over ₹72 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 218 employees supports ₹32.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹32.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.7% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE18.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +3% while net margin moved +21% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+3%

Margin effect+21%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ ROE of 6.2% is weak
✗ ROE has fallen by 9.4 points over the period

Quality vs. Valuation

Company Quality

34/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

32/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

108.3x

3Y Median

36.4x

40 monthly readings · mean 37.5x · range 4.7x–87.3x

Sector Median

12.2x

median of 4 sector peers

⚠️Current valuation is approximately 198% above its 3y median of 36.4x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 791% above the peer median of 12.2x.

vs. its own history

Expensive

36.4x median over 40 months · +198%

vs. sector peers

Expensive

12.2x median of 4 peers · +791%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

11.8x

PEG

14.47

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 15.6% to 6.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 14.2% to 9.7% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 3 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 77% over 3 years, from ₹1 Cr to ₹1 Cr.
🔴High leverageFinancial
Debt/Equity of 2.23x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.0 points, from 20.3% to 14.2%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 14.5x to 4.8x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 34% against revenue up 3% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.97 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 20.3% to 14.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.23x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 34% against revenue up 3%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 198% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 1.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 12%✓ 14.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 1.0% CAGR
Latest reported year was 14.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 9.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

2 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 4 neutral · 5 weak

Market Cap

₹134 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

108.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.86x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.66

Profitable

Profitable on a per-share basis

ROE

6.2%

Weak

Weak capital efficiency

ROCE

9.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.23x

High

High leverage

Revenue Growth (YoY)

14.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-51.2%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.4%

Average

Average margins

Net Margin

1.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.97

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.58

Defensive

Steadier than the market

52W Range Position

33%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

73.3 / 76.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

32.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹69 Cr	₹67 Cr	₹69 Cr	₹72 Cr	+1.0%
EBITDA	₹14 Cr	₹11 Cr	₹31 Cr	₹10 Cr	-10.2%
EBITDA Margin	20.3%	16.4%	44.6%	14.2%	—
PAT (Net Profit)	₹2 Cr	₹5 Cr	₹22 Cr	₹3 Cr	+7.5%
EPS	₹1.25	₹2.79	₹11.73	₹1.55	+7.4%
ROE	15.6%	25.1%	51.1%	6.2%	—
ROCE	14.2%	18.8%	40.1%	9.7%	—
Total Debt	₹1 Cr	₹2 Cr	₹1 Cr	₹1 Cr	+21.0%
Free Cash Flow	₹17 Cr	₹2 Cr	-₹0 Cr	-₹3 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.0% a year).

🔴 EBITDA has shrunk at 10.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.3% to 14.2% over 3 years (-6.0 pts).

🟢 PAT (Net Profit) has grown at 7.5% a year over 3 years.

🟢 EPS has grown at 7.4% a year over 3 years.

🔴 ROE has fallen from 15.6% to 6.2% over 3 years (-9.4 pts).

🔴 ROCE has fallen from 14.2% to 9.7% over 3 years (-4.4 pts).

🔴 Total Debt has grown at 21.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹17 Cr to -₹3 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹129 Cr

Total Liabilities

₹83 Cr

Cash & Equivalents

₹14 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

2.7%

Insider Holding

67.5%

Corporate Actions

Ex-Dividend Date

20 Nov 2015

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

1 positive3 mixed2 general

DCM Shriram (NSE:DCMSHRIRAM) Could Be A Buy For Its Upcoming Dividend

Simply Wall Street, 27 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

DCM Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Why DCM Shriram Share Price is Rising

Equitymaster, 29 Jul

DCM Shriram Industries Limited's (NSE:DCMSRIND) 68% Dip In Price Shows Sentiment Is Matching Earnings

Simply Wall Street, 27 DecResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

DCM Shriram Industries Ltd. Share Price: Price Rise Analysis

Univest, 17 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

DCM Shriram International Ltd. Share Price: 8.19% Gain Today

Univest, 19 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑