Shares of DCX Systems surged 5% to ₹345, hitting the upper circuit limit on September 17, 2024. This sharp rise follows the company's subsidiary receiving an industrial license from the Cochin Special Economic Zone (CSEZ). The license allows the subsidiary to manufacture and test microwave submodules, avionics, and defense electronic equipment.
The license, valid for 15 years, permits the production of highly classified and sensitive defense equipment under CATEGORY-A as per the Ministry of Defence Security Manual. Despite a lackluster performance earlier this year, with the stock gaining only 1.6% since January, this development has positively impacted the share price.
Recently, DCX Systems secured significant orders, including a ₹187 crore contract from an overseas customer for electronic kits, expected to be fulfilled within 12 months. In August, the company also received a ₹107 crore order for electronic kits, cables, and wire harness assemblies, with a similar timeline for execution.
In the June quarter, DCX Systems reported a 19% decline in revenue year-on-year and a 69% drop in net profit, coupled with an operating loss of ₹4.8 crore due to rising costs. Despite these challenges, brokerage KR Choksey remains optimistic, anticipating clearer growth prospects in Q2 driven by a strong order pipeline. The brokerage has maintained its earnings forecasts for FY25 and FY26, bolstered by a robust order book and the commercial production of Raneal Advanced Systems.
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