Ajay Upadhyaya Portfolio Stock DCX Systems has 54% upside potential

Ajay Upadhyaya holds 31,13,000 shares of DCX Systems in his portfolio which is worth ₹93 crore at the CMP of ₹303.

According to a research report by KR Choksey, the recent order wins by DCX Systems adds confidence on the revenue visibility for the near to medium term. However, lack of clarity on the recovery of increased raw material costs and persisting margin pressure have caused it to revise down our EPS estimates for FY25E and FY26E by -34%/-10%. Overall, it continues to hold the conviction on DCX’s ability to become a key player in EMS space with huge potential lying ahead in the railway and defence space. Consequently, it has retained its P/E multiple of 36x on FY26E EPS and maintain the BUY rating on the counter with the target price of INR 466 (Previously: INR 519)

“DCX has an order book of INR 30,000 Mn as of 12th Nov’24 vs 19,370 Mn as of 30th June’24. The order book also includes INR 4,603 Mn from Lockheed Martin and also another order worth of INR 3,796 Mn (through Raneal Advanced Systems) from Lockheed Martin for supply of electronic assemblies.

The massive jump in order book has arrested the concerns around DCX’s ability to secure large orders. Additionally, inclusion of key clients such as L&T and Lockheed Martin underscores DCX’s ability to deliver high value complicated and critical products for leading defense players,” it was added.