DCX Systems stock zooms 15% as investors cheer over 100% spike in Q2 net profit

Mutual funds increased holdings to 3.62 percent in the September-ended quarter from 3.3 percent in the previous quarter

Shares of DCX Systems zoomed 15 percent to Rs 304 on October 31 after the company's net profit for the September quarter of this fiscal more than doubled to Rs 20  crore.

The S&P BSE Sensex was flat at 64,085 levels, as of 9:50am. So far on October 31, around 1.5 million equity shares changed hands on both BSE and NSE as against one-month average of 0.4 million equity shares.

In the past six months, the stock of this wire and cable manufacturer surged 46 percent as against 4 percent rise in the Sensex benchmark.

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DCX Systems revenue climbed 77 percent on-year to Rs 309 crore in Q2FY24 as against Rs 173 crore a year ago, driven by successful execution of order book.

As of September, the order book stood over at Rs 1,258 crore. The company’s earnings before interest and tax (EBIT) improved 93 percent on-year to Rs 30 crore in Q2FY24 versus Rs 15 crore in Q2FY23.

EBIT margins for the quarter expanded by 100 basis points (bps) to 10 percent in Q2FY24 due to improved operational efficiency and supply chain measures.

“We have a healthy and strong order book which gives an optimistic outlook for the near future. Our focus remains on securing raw materials to support the anticipated growth and rationalising expenses to improve operational efficiencies,” said HS Raghavendra Rao, Chairman & Managing Director, DCX Systems.

Also read: This defence stock gets it right for safety of capital, reasonable returns

DCX Systems is one of the leading Indian defence manufacturer player, offering full service and manufacturing of electronic sub-systems and cable and wire harness assemblies for both international and domestic reputed customers. The company commenced operations in 2011 and has been a preferred Indian Offset Partner (IOP) for foreign original equipment manufacturers (OEMs) for executing defence manufacturing projects.

As of September-ended quarter, foreign institutional investors (FIIs) decreased holdings to 0.07 percent from 0.6 percent in the June-ended quarter.

Institutional investors too decreased holdings to 8.2 percent in September 2023 from 9.9 percent in June 2023. Mutual funds, on the other hand, increased holdings to 3.62 percent in the September-ended quarter from 3.3 percent in the previous quarter.