DCM Shriram Limited

Industrials — Conglomerates · NSE

₹1,015.90+₹3.05 (+0.30%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with modest growth. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

DCM Shriram Limited, together with its subsidiaries, engages in agri-rural, chemicals and vinyl, and value added businesses in India and internationally.

IndustryConglomerates

SectorIndustrials

Employees6,549

Annual revenue₹13,461 Cr

How does it make money?

Turns over ₹13,461 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 6,549 employees supports ₹2.06 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.06 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA 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 11.1% 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 ROE15.2%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +17% while net margin moved -20% 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-20%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.5% — barely ahead of inflation
✗ Profit has declined at 2.1% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

52/ 100

Average

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

Valuation

80/ 100

Cheap

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

11.1x

3Y Median

28.8x

40 monthly readings · mean 27.5x · range 14.6x–49.9x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 62% below its 3y median of 28.8x. 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 88% below the peer median of 88.8x.

vs. its own history

Cheap

28.8x median over 40 months · -62%

vs. sector peers

Cheap

88.8x median of 3 peers · -88%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.6x

PEG

—

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 14.7% to 11.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.9% to 11.1% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 71% over 3 years, from ₹1,707 Cr to ₹2,923 Cr.
🟡Margins are compressingFinancial
EBITDA margin is down 2.2 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 62% 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 88% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹346 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 15.1% to 12.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Growth barely outpaces inflation
Revenue compounding at 5.5% 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.
Returns on shareholder capital are falling
ROE has dropped from 14.7% to 11.1%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small 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 11%✓ 12.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 5.5% CAGR
Latest reported year was 9.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹346 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 11.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

5 good · 6 neutral · 0 weak

Market Cap

₹15,732 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.1x

Cheap

Cheap against the generic band

P/B Ratio

2.11x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹91.86

Profitable

Profitable on a per-share basis

ROE

11.1%

Moderate

Moderate capital efficiency

ROCE

11.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.38x

Low

Conservative leverage

Revenue Growth (YoY)

9.3%

Modest

Modest growth

Profit Growth (YoY)

511.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.57%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹346 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

23.7x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

5.8%

Average

Average margins

Net Margin

10.4%

Good

Strong bottom-line conversion

Current Ratio

1.49

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.33

Defensive

Steadier than the market

52W Range Position

25%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

972.7 / 1002.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

54.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11,479 Cr	₹10,865 Cr	₹11,995 Cr	₹13,461 Cr	+5.5%
EBITDA	₹1,729 Cr	₹1,035 Cr	₹1,423 Cr	₹1,728 Cr	-0.0%
EBITDA Margin	15.1%	9.5%	11.9%	12.8%	—
PAT (Net Profit)	₹911 Cr	₹447 Cr	₹604 Cr	₹853 Cr	-2.1%
EPS	₹58.41	₹28.67	₹38.75	₹54.73	-2.1%
ROE	14.7%	6.9%	8.6%	11.1%	—
ROCE	17.9%	8.8%	11.1%	11.1%	—
Total Debt	₹1,707 Cr	₹2,152 Cr	₹2,529 Cr	₹2,923 Cr	+19.6%
Free Cash Flow	-₹507 Cr	-₹525 Cr	₹268 Cr	₹346 Cr	—

🟢 Revenue has grown at 5.5% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-0.0% a year).

🔴 EBITDA Margin has fallen from 15.1% to 12.8% over 3 years (-2.2 pts).

🔴 PAT (Net Profit) has shrunk at 2.1% a year over 3 years.

🔴 EPS has shrunk at 2.1% a year over 3 years.

🔴 ROE has fallen from 14.7% to 11.1% over 3 years (-3.6 pts).

🔴 ROCE has fallen from 17.9% to 11.1% over 3 years (-6.8 pts).

🔴 Total Debt has grown at 19.6% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹507 Cr to ₹346 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14,137 Cr

Total Liabilities

₹6,404 Cr

Cash & Equivalents

₹306 Cr

Operating Cash Flow

₹1,234 Cr

Capex

-₹887 Cr

Shareholding (proxy)

Institutional Holding

9.4%

Insider Holding

75.8%

Corporate Actions

Dividend Rate

₹16

Ex-Dividend Date

31 Jul 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

2 positive1 mixed1 negative2 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 Shriram Fine Chemicals Ltd. Share Price Live Today

CNBC TV18, 09 OctRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Why DCM Shriram Share Price is Rising

Equitymaster, 29 Jul

DCM Shriram promoters consolidate stake via off-market transfer

scanx.trade, 06 Aug

DCM Shriram Starts Renewable Power Flow At Kota; Shares Gain Over 1.5%

HDFC Sky, 04 MayPrice 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 Shares Skyrocket 13% After Q1 Net Profit Surges To Rs 693 Crore

NDTV Profit, 29 JulResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Profitability · Risk

WeakGrowth

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑