DCMSHRIRAM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Fundamental Analysis: DCM Shriram Ltd (DCMSHRIRAM) Fundamental Rating: 3.3

🧾 Core Financials Overview

Profit Metrics

EPS: ₹39.6 ➜ respectable for the segment

PAT down from ₹179 Cr to ₹113 Cr ➜ QoQ decline; reflects margin pressures or seasonal demand shifts

Return Ratios

ROE: 8.66%, ROCE: 11.4% ➜ below optimal for a multi-business conglomerate

Leverage & Liquidity

Debt-to-equity: 0.36 ➜ moderate debt profile — not excessive

Dividend Yield: 0.63% ➜ modest income stream for investors

📍 Note: Financial strength is fair, but not outstanding — earnings volatility warrants attention.

💸 Valuation Metrics

Indicator Value Interpretation

P/E Ratio 35.9 Above industry avg (24.9) ➜ expensive vs peers

P/B Ratio ~3.17 (₹1,422 / ₹449) ➜ reasonable asset pricing

PEG Ratio -2.04 Negative — could indicate declining earnings or unreliable projections

🔎 Conclusion: Valuation appears stretched given recent earnings softness. PEG suggests growth may be contracting.

🏭 Business Model & Strategic Advantage

Diversified operations across

Sugar, ethanol, biofuels

PVC, chemicals, and fertilizers

Strengths

Synergistic agro-industrial verticals

Government support via ethanol blending policies and fertilizer subsidies

Risks

Highly cyclical segments (sugar, chemicals)

Earnings sensitive to raw material costs and regulatory interventions

📊 Institutional Trends

FII ↑ 0.04%, DII ↑ 0.28% ➜ mild optimism among domestic funds

📉 Technical View

RSI: 63.8 ➜ approaching overbought — caution warranted

MACD: +53.4 ➜ bullish momentum confirmed

Price trading above both DMA 50 & 200 ➜ positive trend continuation

✅ Suggested Entry Zone: ₹1,275–₹1,325 ⚠️ Avoid buying near recent highs — wait for technical consolidation or broader sector pullback.

📅 Long-Term Investment Outlook

🧠 Suitable for investors

Looking for exposure to India’s agri & industrial reforms

Comfortable with cyclical earnings and policy dependency

Seeking mid-cap with dividend stability and diversified revenue streams

🔔 Watch for

Expansion in ethanol and PVC capacity

Margin trends across commodity-linked businesses

Policy shifts impacting fertilizer and sugar pricing

If you’re scouting similar picks in agri-chem or ethanol like Deepak Fertilisers or Balrampur Chini, I can stack them side-by-side for sharper perspective. Ready when you are.

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