DCM Nouvelle Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹170.00₹0.00 (0.00%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

DCM Nouvelle Limited engages in the manufacturing and sale of cotton yarn in in India, Bangladesh, China, Guatemala, Egypt, and internationally.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees1,790

Annual revenue₹902 Cr

How does it make money?

Turns over ₹902 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 1,790 employees supports ₹50.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin5.8%

Net margin0.4%

Revenue / employee₹50.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

What is its competitive advantage?Little sign of one

Returns on capital of 5.3% 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.

ROCE5.3%

ROE1.1%

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +17% while net margin moved -75% 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+17%

Margin effect-75%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.4% — barely ahead of inflation
✗ Profit has declined at 33.5% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

39/ 100

Weak

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

Valuation

83/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

11.0x

3Y Median

30.7x

40 monthly readings · mean 36.3x · range 20.5x–99.3x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 64% below its 3y median of 30.7x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 84% below the peer median of 69.2x.

vs. its own history

Cheap

30.7x median over 40 months · -64%

vs. sector peers

Cheap

69.2x median of 4 peers · -84%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

11.0x

P/B

0.97x

EV/EBITDA

12.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Valuation below its historical average
At 11.0x the stock trades 64% below its own median of 30.7x.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 117% against revenue growth of 17% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🔴Receivables growing faster than salesFinancial
Receivables up 117% against revenue up 17% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 71% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 64% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 84% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 6.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 117% against revenue up 17%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 5.4% 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.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

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

1EBITDA margin holds above 4%✓ 5.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 5.4% CAGR
Latest reported year was 13.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹39 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹318 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.0x

Cheap

Cheap against the generic band

P/B Ratio

0.97x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹15.46

Profitable

Profitable on a per-share basis

ROE

1.1%

Weak

Weak capital efficiency

ROCE

5.3%

Weak

Low return on total capital employed

Debt/Equity

0.98x

Moderate

Moderate leverage

Revenue Growth (YoY)

13.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1662.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

₹39 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹170

Operating Margin

14.4%

Average

Average margins

Net Margin

2.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.05

Market-like

Moves roughly in line with the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

173.4 / 176.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

37.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹771 Cr	₹952 Cr	₹953 Cr	₹902 Cr	+5.4%
EBITDA	₹35 Cr	₹39 Cr	₹58 Cr	₹53 Cr	+14.1%
EBITDA Margin	4.6%	4.1%	6.0%	5.8%	—
PAT (Net Profit)	₹12 Cr	-₹3 Cr	₹9 Cr	₹4 Cr	-33.5%
EPS	₹6.24	₹-1.75	₹4.77	₹1.93	-32.4%
ROE	3.9%	-1.0%	2.7%	1.1%	—
ROCE	5.2%	3.7%	7.9%	5.3%	—
Total Debt	₹265 Cr	₹372 Cr	₹338 Cr	₹328 Cr	+7.4%
Free Cash Flow	-₹112 Cr	-₹89 Cr	₹57 Cr	₹39 Cr	—

🟢 Revenue has grown at 5.4% a year over 3 years.

🟢 EBITDA has grown at 14.1% a year over 3 years.

🟢 EBITDA Margin has risen from 4.6% to 5.8% over 3 years (+1.2 pts).

🔴 PAT (Net Profit) has shrunk at 33.5% a year over 3 years.

🔴 EPS has shrunk at 32.4% a year over 3 years.

🔴 ROE has fallen from 3.9% to 1.1% over 3 years (-2.8 pts).

🟡 ROCE has held roughly flat at 5.3% over 3 years.

🔴 Total Debt has grown at 7.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹112 Cr to ₹39 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹734 Cr

Total Liabilities

₹400 Cr

Total Debt

₹328 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹51 Cr

Capex

-₹12 Cr

Shareholding (proxy)

Institutional Holding

1.2%

Insider Holding

62.9%

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

1 positive1 mixed4 general

DCM Nouvelle net profit surges 371% to ₹3,145 lacs in Q1FY27

scanx.trade, 18 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

DCM Nouvelle vs Nahar Industrial Enterprises vs Vishal Fabrics

Univest, 16 Oct

DCM Nouvelle Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

DCM Nouvelle Upper Circuit Today: Price, Data and Peers

Univest, 05 Oct

DCM Nouvelle declares voting results for 10th AGM resolutions

scanx.trade, 26 SeptResults

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

DCM Nouvelle Share Price Forecast: 3 Year Outlook to 2030

Univest, 16 Jul

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate11.7/20

🔴GrowthWeak5.7/20

🔴ProfitabilityWeak4.5/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.6/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 4%5.8%
✗Debt / EBITDA falls below 3x6.2x
✗Interest cover stays above 3x1.5x
✓Revenue growth stays above 4% a year5.4% CAGR
✓Free cash flow remains positive₹39 Cr