DCM - DCM

📊 NSE: DCM 🏢 Castings & Forgings 📅 Last Updated: 12/13/2025 21:23

💰 Financial Performance

Revenue Growth by Segment

The Engineering Division's sales and other income declined by 75.68% YoY, falling from INR 374.41 lakh in FY24 to INR 91.06 lakh in FY25. Standalone revenue from operations for the full year FY25 was reported at INR 26.80 lakh. However, recent unaudited results for the half-year ended September 30, 2025, show a significant increase to INR 2,274.60 lakh, suggesting a recovery or new revenue streams compared to the INR 2,136.95 lakh in the corresponding previous half-year.

Geographic Revenue Split

The company operates in India and the USA, particularly within its IT and Engineering segments. Specific percentage splits per region are not disclosed in the provided documents.

Profitability Margins

The Operating Profit Margin improved significantly to 12.03% in FY25 from 0.37% in FY24. The Net Profit Ratio also turned positive at 5.66% in FY25 compared to -0.19% in FY24, primarily driven by an increase in net profit despite the operational challenges in the engineering segment.

EBITDA Margin

The Engineering Division reported a negative EBITDA (Profit/loss before finance cost, depreciation, and tax) of INR -298.70 lakh in FY25, worsening from INR -195.36 lakh in FY24. This decline is attributed to the continued lockout and lack of production volume.

Capital Expenditure

The company maintained property, plant, and equipment records, but specific planned CAPEX figures for future expansions were not disclosed. Depreciation for the Engineering Division was INR 304.32 lakh in FY25.

Credit Rating & Borrowing

CRISIL Ratings has migrated the company's bank facilities to 'CRISIL D/CRISIL D Issuer not cooperating' as of 2025. This rating indicates default or high risk of default, exacerbated by a lack of management cooperation and inadequate information for credit assessment.

⚙️ Operational Drivers

Raw Materials

The Engineering Division primarily requires grey iron for the manufacturing of castings, including cylinder heads and blocks. However, due to the lockout, raw material consumption for production was zero in FY25.

Capacity Expansion

The Engineering Division has 0 MT of production and sales as of FY25 due to a continuous lockout since October 22, 2019. No specific expansion plans for the engineering unit are mentioned given the industrial unrest.

Raw Material Costs

Raw material costs are currently negligible for the engineering segment due to the production halt. Revenue in this segment is primarily derived from scrap sales, which saw a significant volume reduction in FY25.

Manufacturing Efficiency

Manufacturing efficiency is currently non-existent in the Engineering Division with 0 MT production. Capacity utilization is 0% due to the ongoing lockout.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The company is focusing on its IT services through its material subsidiary, DCM Infotech Limited, which provides infrastructure services like system administration and disaster management. It also maintains a presence in real estate to diversify away from the stalled engineering business.

Products & Services

Final products include grey iron castings, cylinder heads, cylinder blocks, and housing for the auto industry (currently inactive). Services include IT infrastructure management, system administration, storage management, and backup recovery.

Brand Portfolio

DCM, DCM Infotech.

Market Expansion

The company has a presence in India and the USA for its IT services, but specific expansion timelines are not provided.

Market Share & Ranking

The Engineering Division was historically one of India's large independent manufacturers of grey iron castings, but its current market share is negligible due to the operational halt.

Strategic Alliances

The company operates through five subsidiaries and one associate company, including the material subsidiary DCM Infotech Limited.

🌍 External Factors

Industry Trends

The engineering industry for auto castings is mature, but DCM is currently displaced due to internal labor issues. The IT services industry is evolving toward cloud and disaster management, where DCM Infotech is positioned.

Competitive Landscape

Key competitors include other independent iron foundries and IT infrastructure service providers, though specific names were not listed.

Competitive Moat

The company's historical moat in engineering (established in 1889) has been eroded by a 5-year lockout. Its current survival depends on the IT services subsidiary and real estate assets.

Macro Economic Sensitivity

The company is sensitive to the economic outlook in India and the USA, as well as changes in government purchase procedures and tax regimes.

Consumer Behavior

Demand is driven by auto players (cars, tractors, earth-moving equipment) for the engineering side and corporate infrastructure needs for the IT side.

Geopolitical Risks

Operations are subject to changes in international regulations and economic outlooks in the USA, which could affect the IT services segment.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with the SARFAESI Act regarding debt recovery and NHB guidelines for NPA classification. It also faces regulations related to industrial labor laws which led to the declared lockout.

Taxation Policy Impact

The company is subject to Indian corporate tax laws; however, it reported a loss before tax of INR 603.02 lakh in its engineering division for FY25.

Legal Contingencies

Pending litigation includes a matter before the Punjab VAT Tribunal, Chandigarh, and the Deputy Commissioner Appeal, Mohali. Additionally, a SARFAESI Act notice was issued on November 7, 2025, following an NPA classification on October 29, 2025.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'continued situation of lockout' at the Engineering Business Undertaking since 2019, which continues to adversely affect key financials. There is also a risk of asset seizure under the SARFAESI Act.