Multibagger DCX Systems stock hits 5% upper circuit on ₹107 crore order win

DCX Systems stock hits 5% upper circuit of ₹337.95 apiece in today's early morning trade after the company announced a new order worth ₹107 crore from domestic and overseas customers. This order involves the supply of electronic kits and cable & wire harness assemblies, as disclosed in an exchange filing on August 16.

In July, the company secured a significant order worth ₹1,250 crore from Larsen & Toubro Limited for the manufacture and supply of electronic modules. Throughout the year, DCX Systems has received multiple orders, including export contracts.

New supply and services agreement

During the June quarter, the company entered into a Supply and Services Agreement with Israel Aerospace India Services Private Limited for the supply and repair of spare parts and electronic components, focusing on Maintenance, Repair, and Overhaul (MRO).

Q1 FY25 financial results

The company has recently released its Q1 FY25 results, which shows a decline in both revenue and net profit. Revenue for the reporting quarter came in at ₹138.08 crore, down from ₹170.10 crore in Q1 FY24. EBIT stood at ₹10.70 crore compared to ₹18.51 crore in Q1 FY24, with the EBIT margin dropping to 7.75% from 10.88% on YoY basis. 

Profit after tax also decreased, standing at ₹2.94 crore in June quarter, down from ₹9.60 crore in Q1 FY24. The company's order book as of June 30, 2024, stood at ₹1,937 crore, according to the company's earnings report. 

DCX Systems, a leading player in Indian defence manufacturing, specializes in offering full-service solutions and manufacturing of electronic systems, sub-systems, and cable & wire harness assemblies for both international and domestic clients.

The company is strategically positioned to benefit from a global increase in defence spending, which is expected to grow from $2,290 billion in 2023 to $2,652 billion by 2027. This surge is being driven by ongoing geopolitical tensions, efforts to modernize armed forces, shifting global power dynamics, technological advancements, and changing policies.

In alignment with global trends, the defence electronics market is poised for substantial growth. Projections show it will expand from $142 billion in 2022 to $237 billion by 2030, with the specific market for defence electronics in India expected to grow from $2,577 million in 2022 to $7,204 million by 2030, as per the recent estimates. 

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