Applied for DCX IPO today. Here's why??
DCX Systems is one of the leading Indian players in the manufacture of electronic sub-systems & cable harnesses primarily catering to Aerospace & defence industry
At 207, PE - 30 is reasonable compared to peers, expecting listing gains!
DCX Systems is one of the leading Indian players in the manufacture of electronic sub-systems & cable harnesses primarily catering to Aerospace & defence industry
At 207, PE - 30 is reasonable compared to peers, expecting listing gains!
Positives
1 Strong Industry Tailwinds
Majority of revenue of DCX is from Defence and aerospace industry
2 Huge Opportunity
in Defence offset business, where MOD has announced offset backlog of $13.4B to be completed in next 7 years, out of which 25% belongs to DCX category
1 Strong Industry Tailwinds
Majority of revenue of DCX is from Defence and aerospace industry
2 Huge Opportunity
in Defence offset business, where MOD has announced offset backlog of $13.4B to be completed in next 7 years, out of which 25% belongs to DCX category
3. Leader among competitors
DCX's in-house capabilities and vertical integration enables them to offer customization as per clients ranging from design to testing in cable assemblies, system Integration and ready to assemble kits.
DCX plans to expand to MRO vertical too
DCX's in-house capabilities and vertical integration enables them to offer customization as per clients ranging from design to testing in cable assemblies, system Integration and ready to assemble kits.
DCX plans to expand to MRO vertical too
4. Strong order book
DCX has better revenue and PAT growth over 2 years, a healthy ROE and also has global accreditations and tieups wuth Global defence players resulting in strong order book of Rs 2,564 crore which provides visibility for the next two years.
DCX has better revenue and PAT growth over 2 years, a healthy ROE and also has global accreditations and tieups wuth Global defence players resulting in strong order book of Rs 2,564 crore which provides visibility for the next two years.
5. Favourable policy
It houses 30000sqft facility in Aerospace SEZ neat Datagalli giving them tax advantages
6. Capital for growth
Out of 400cr to be raised, 100cr is for OFS
Rest is used for capex, debt repayment & investment in its wholly-owned sub Raneal Advanced Systems
It houses 30000sqft facility in Aerospace SEZ neat Datagalli giving them tax advantages
6. Capital for growth
Out of 400cr to be raised, 100cr is for OFS
Rest is used for capex, debt repayment & investment in its wholly-owned sub Raneal Advanced Systems
Risk:
High Client concentration : DCX dependent on a limited number of key customers and in particular ELTA Systems Limited and Israel Aerospace Industries Limited,for a major portion of revenues.
Volatility in raw material prices & change in defense spending are the risks
High Client concentration : DCX dependent on a limited number of key customers and in particular ELTA Systems Limited and Israel Aerospace Industries Limited,for a major portion of revenues.
Volatility in raw material prices & change in defense spending are the risks
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