DCM Shriram Industries Limited

Consumer Defensive — Confectioners · NSE

₹39.99−₹0.19 (−0.47%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Strong business and financial position, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Shriram Industries 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 Industries Limited engages in the production and sale of sugar, alcohol, and power products in India and Nepal.

IndustryConfectioners

SectorConsumer Defensive

Employees843

Annual revenue₹1,153 Cr

How does it make money?

Turns over ₹1,153 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 843 employees supports ₹1.37 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin9.0%

Net margin3.6%

Revenue / employee₹1.37 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

What is its competitive advantage?Some evidence

ROCE of 17.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE17.6%

ROE11.4%

Peer median ROE51.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -50% while net margin moved +40% 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-50%

Margin effect+40%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 20.9% a year
✗ Profit has declined at 11.6% a year
✗ Latest-year revenue growth of -41.1% is below the longer-term trend — momentum is fading
✗ Profit fell 90.7% in the latest year

Quality vs. Valuation

Company Quality

50/ 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

13.4x

3Y Median

15.2x

40 monthly readings · mean 17.7x · range 6.0x–31.6x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 12% below its 3y median of 15.2x. 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 69% below the peer median of 43.3x.

vs. its own history

Fair

15.2x median over 40 months · -12%

vs. sector peers

Cheap

43.3x median of 4 peers · -69%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

13.4x

P/B

0.95x

EV/EBITDA

7.2x

PEG

—

Dividend Yield

1.00%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 6.8% to 9.0% over 3 years.
Debt is being paid down
Total debt is down 16% over 3 years.
Return on equity is rising
ROE has improved from 8.4% to 11.4%.
Return on capital is rising
ROCE has improved from 13.4% to 17.6%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 watch

🟡Profit is decliningFinancial
Net profit is down 31% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.8% to 9.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 16% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 69% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

The debt load needs earnings to hold up
Debt is 4.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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 7%✓ 9.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.1x
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✓ 3.6x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹64 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 15%✓ 17.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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 · 4 neutral · 2 weak

Market Cap

₹348 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.4x

Cheap

Cheap against the generic band

P/B Ratio

0.95x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.98

Profitable

Profitable on a per-share basis

ROE

11.4%

Moderate

Moderate capital efficiency

ROCE

17.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.17x

Moderate

Moderate leverage

Revenue Growth (YoY)

-41.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-90.7%

Falling

Profits are shrinking

Dividend Yield

1.00%

Modest

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

Free Cash Flow

₹64 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹39.99

Operating Margin

0.9%

Weak

Thin margins leave little room for error

Net Margin

2.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.12

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

39.2 / 42.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

50.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,327 Cr	₹2,056 Cr	₹1,070 Cr	₹1,153 Cr	-20.9%
EBITDA	₹158 Cr	₹243 Cr	₹88 Cr	₹104 Cr	-13.2%
EBITDA Margin	6.8%	11.8%	8.3%	9.0%	—
PAT (Net Profit)	₹60 Cr	₹115 Cr	₹30 Cr	₹42 Cr	-11.6%
EPS	₹6.92	₹13.27	₹5.69	₹2.63	-27.6%
ROE	8.4%	14.2%	9.0%	11.4%	—
ROCE	13.4%	20.5%	15.4%	17.6%	—
Total Debt	₹507 Cr	₹529 Cr	₹443 Cr	₹425 Cr	-5.7%
Free Cash Flow	₹116 Cr	₹41 Cr	₹46 Cr	₹64 Cr	-18.1%

🔴 Revenue has shrunk at 20.9% a year over 3 years.

🔴 EBITDA has shrunk at 13.2% a year over 3 years.

🟢 EBITDA Margin has risen from 6.8% to 9.0% over 3 years (+2.2 pts).

🔴 PAT (Net Profit) has shrunk at 11.6% a year over 3 years.

🔴 EPS has shrunk at 27.6% a year over 3 years.

🟢 ROE has risen from 8.4% to 11.4% over 3 years (+3.0 pts).

🟢 ROCE has risen from 13.4% to 17.6% over 3 years (+4.2 pts).

🟢 Total Debt has shrunk at 5.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 18.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,419 Cr

Total Liabilities

₹1,054 Cr

Total Debt

₹425 Cr

Cash & Equivalents

₹32 Cr

Operating Cash Flow

₹96 Cr

Capex

-₹32 Cr

Shareholding (proxy)

Institutional Holding

7.5%

Insider Holding

54.6%

Corporate Actions

Dividend Rate

₹0.4

Ex-Dividend Date

03 Jul 2026

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 positive1 mixed1 negative3 general

DCM Shriram promoters consolidate stake via off-market transfer

scanx.trade, 06 Aug

DCM Shriram Industries Limited (NSE:DCMSRIND) Stock Goes Ex-Dividend In Just Three Days

Simply Wall Street, 29 JunCapital return

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

DCM Shriram Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

DCM Shriram demerger: Last day to buy the shares for eligibility

The Economic Times, 23 Dec

DCM Shriram Fine Chemicals, DCM Shriram International debut after demerger

Business Standard, 17 FebRegulatory

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

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.

Watch Items

Revenue growth is negative (-41.1%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate11.5/20

🟢Financial HealthStrong13.3/20

🔴GrowthWeak4.1/20

🟡ProfitabilityModerate8.5/15

🟢ValuationAttractive11.8/15

🔴RiskHigh4.4/10

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.

This thesis breaks if

✓EBITDA margin holds above 7%9.0%
✗Debt / EBITDA falls below 3x4.1x
✓Interest cover stays above 3x3.6x
✓Free cash flow remains positive₹64 Cr
✓ROCE stays above 15%17.6%