DCX Systems stock jumps 4% on securing order worth Rs 187 crore

Over the past 3 months, the stock of this electronic subsystems and cable maker has surged over 8 percent

Shares of DCX Systems rallied up to 4 percent to Rs 344 apiece on August 28 after it secured Rs 187 crore order from overseas customer for supply of electronic kits. The order is said to be executed within 12 months.

Over the past 3 months, the stock of this electronic subsystems and cable maker has surged over 8 percent, undeperforming benchmark Nifty's 9 percent rise. Earlier, DCX Systems had hit 451 apiece on July 3, 2024.

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DCX Systems is engaged in the manufacturing and distribution of electronic sub-systems and cable harnesses, catering primarily to the aerospace and defense sectors both domestically in India and internationally.

Earlier this month, DCX Systems secured an order worth Rs 107 crore from domestic and overseas customers for the supply of electronic kits, cables, and wire harness assemblies. The order is expected to be executed within 12 months.

Analysts at KR Choksey issued a 'buy' call for DCX Systems, setting a target price of Rs 519, implying an upside of 50 percent from current levels. The report highlighted that the company’s first quarter typically experiences slower growth, and this year was no exception. With a strong order book, the brokerage firm recommended investing in the stock.

In the recently concluded June quarter, the company’s revenue fell 19 percent year-on-year, and its net profit dropped by 69 percent YoY. The company also reported an operating loss of Rs 4.8 crore for the quarter, largely due to increased costs.

Despite this negative news, KR Choksey remained optimistic about the company's long-term growth potential. "We believe Q2 should add more visibility in terms of the quantum of acceleration on the growth given the strong order pipeline. We maintain our earnings estimates for FY25E and FY26E aided by strong order book, higher focus on cable & wire harnessing and commercial production of Raneal Advanced Systems," the brokerage firm added.