Shares of DCX Systems, a key player in the defence sector, have caught the attention of analysts at Anand Rathi, who foresee a potential sharp upside in the stock price. Despite recent weakness, the brokerage has issued a bullish call, forecasting a 16 percent gain in the near term based on a strong technical setup and improving momentum indicators. This article delves into the factors driving the optimism around DCX India and whether investors should consider adding it to their portfolios.
Strong Technical Setup Supports Bullish Call
According to Anand Rathi, DCX India is currently trading near a critical support zone between ₹275 and ₹280. This level aligns with a previous breakout area and the S3 monthly Camarilla pivot, marking a significant technical floor. The hourly Relative Strength Index (RSI) also sits in oversold territory, suggesting the stock may be forming a solid base in this range. Based on these signals, Anand Rathi recommended a long position in the ₹275-280 range, setting an upside target of ₹320 with a stop-loss below ₹257 on a closing basis. These technical indicators form the core rationale for the brokerage’s bullish stance on DCX India.
Recent Order Wins Highlight Business Potential
DCX India announced a fresh order worth ₹4.36 crore from a leading multinational company operating in defence, aerospace, space, and security sectors. The contract involves manufacturing and supplying special test equipment, consistent with terms laid out in the purchase agreement. Prior significant orders include contracts from Israeli defence firms ELTA Systems Ltd. ( ₹7.89 crore), Elbit Systems Ltd. ( ₹10.83 crore), and Rafael Advanced Defence Systems ( ₹5.04 crore), as well as domestic Indian clients ( ₹4.83 crore). These wins underscore DCX Systems’ growing footprint as a key supplier of defence-grade electronic systems and cable harnesses for both international and domestic markets.
Q4 Financials Show Revenue and Profit Challenges
DCX Systems reported a 26.3 percent decline in revenue for the quarter ending March 2025, falling to ₹549.96 crore from ₹746.2 crore in the year-ago period. Net profit also dropped by 37.2 percent to ₹20.7 crore. Earnings Before Interest and Tax (EBIT) declined 42.2 percent to ₹30 crore, with margins narrowing to 5.46 percent from 6.96 percent last year.
For the full financial year, revenue fell 24 percent to ₹1,083.7 crore, missing the company’s growth guidance of 35-40 percent.
However, the consolidated order book stood at ₹2,855 crore as of March 31, 2025, marking a more than threefold increase from the previous year and a 32 percent rise compared to the second half of FY24. This surge in orders points to a strong pipeline despite recent revenue pressures.
Stock Performance: Discounted Yet Promising
Over the past year, DCX India’s stock price has dropped 24 percent, including a 10 percent decline in June after rallies in April and May. The current market price near ₹275 is approximately 39 percent below its 52-week high of ₹451.90 recorded in July 2024, indicating significant correction. The stock also touched a 52-week low of ₹200 in April 2025, reflecting volatility. Anand Rathi’s bullish technical view suggests that this beaten-down stock may be poised for a rebound, potentially offering multibagger returns if momentum sustains.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
