Considering the current defence sector export growth in India, there is one company in which 70% of the revenue comes from the export

DCX System ltd.  is the one which can become the multibagger stock & why this  DCX Systems is the best defence sector stock, Let’s find it out.

Global defence spending is increasing on a year on year basis. It is expected to grow at CAGR of 3.99%.

Global Defence Spending

• Indian Defence electronics market is expected to grow at 13.71% CAGR till 2030
• Indian Defence Exports increased by 13.711 % from 2017 to 2021
• Defence Exports touched record Rs. 21,083 Cr in FY 2123-24, increased by 32.5% in 2023-24.

India Defence Export

• In Last 5 years India’s Defence Exports rise by 150%

Indian Defence Electronics Market

When it comes to the India’s Defence Electronics Market it is expected to grow at 13.71% CAGR till 2030

So in the Defence Electronics market there is one company known as DCX Systems Ltd. which  is in the business of System Integration and Cable & Wire Harnessing

DCX Systems Ltd.

Business Overview

• Engaged in system integration and manufacturing a comprehensive array of cables and wire harness assemblies
• Major focus in aerospace and defence manufacturing sector.
• They are one of the largest Indian Offset Partner (“IOP”) for ELTA Systems Limited and Israel Aerospace Industries Limited, System Missiles and Space Division (together, the “IAI Group”)

Key Customers

• As of September 30, 2023, Co. has 27 customers in Israel, United States, Korea and India, including clients in the defence industry, multinational corporations and start-ups.
• Co. partner with OEMs located in Israel and US to supply wide range of products for aerospace and defence sectors for offset and non-offset programs.

Revenue Mix

• Company derived 70.57%(Rs. 884.73 cr) of its revenue through Exports.
• The Company has customers across Israel, Korea, and North America.
• However, it derived 99.72% of its export revenue from Israel.

Fundamental Analysis

Market Cap	₹ 3,549 Cr
Current Price	₹ 318
High/Low	₹ 393/166
Stock PE	42.6
Book Value	₹ 61.3
ROCE	13.1 %
ROE	20.9 %
Sales Growth 5 years	318%
Debt To Equity	0.69

Shareholding Pattern

Change in Shareholding Pattern

	Mar-23	Mar-24	1 Year Change
Promoters +	71.72%	62.30%	-9.42%
FIIs +	0.94%	2.30%	1.36%
DIIs +	9.69%	11.19%	1.50%
Public +	17.63%	24.24%	6.61%

• Promoters:
  • Mar-23: 71.72%
  • Mar-24: 62.30%
  • 1 Year Change: -9.42%
  • Analysis: There is a significant decrease in promoters’ shareholding, indicating a substantial divestment or dilution of their stake.
• Foreign Institutional Investors (FIIs):
  • Mar-23: 0.94%
  • Mar-24: 2.30%
  • 1 Year Change: +1.36%
  • Analysis: FIIs have more than doubled their stake, reflecting increased foreign interest and confidence in the company.
• Domestic Institutional Investors (DIIs):
  • Mar-23: 9.69%
  • Mar-24: 11.19%
  • 1 Year Change: +1.50%
  • Analysis: DIIs have increased their holdings, indicating growing domestic institutional confidence in the company’s prospects.
• Public:
  • Mar-23: 17.63%
  • Mar-24: 24.24%
  • 1 Year Change: +6.61%
  • Analysis: The public shareholding has increased significantly, suggesting a rise in retail investor interest and participation in the company.

Financial Trend

Sales: 5 Years Comparison

• January 2020: 449 crore
• January 2024: 1423 crore
• Change in Sales : 216%

Net Profit: 5 years Comparison

• January 2020: 10 crore
• January 2024: 68 crore
• Change in Net Profit: 580%

Should You Invest ?

• As 70% of the revenue comes from the exports in DCX systems being in the defence sector will definitely grow
• Being a smallcap company which has market cap of 3500 Cr so it has massive potential to become the 35000 Cr company within 10 years.
  
• Sales & net profits have been continuously increasing & it will continue to grow in the future as well as the Current Modi Government is majorly focused on the defence sector exports.
  
• DII & FII are continuously buying this stock from the last quarter.
• Company’s has strong fundamentals which will help in the long run to hold the stock.

Check Out this: Cochin Shipyards a ship building company gave 608% in 1 year

Disclaimer

• Money Minded School is not a SEBI registered investment advisor, Please do your own research before investing
• This article is a complete guide about DCX Systems Ltd.
• These information and forecasts are based on our analysis, research, company fundamentals and history, experiences, and various technical analyses.
• Also, We have talked in detail about the share’s future prospects and growth potential.
• Hopefully, this information will help you in your further investment.
• If you have any further queries, please comment below. We will be happy to answer all your questions.
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