Check Before You Invest : DRC Systems India Ltd

Q: Which industry/sub-sector does DRC Systems India Ltd belong to?

DRC Systems India Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.

Q: Is DRC Systems India Ltd a good quality company?

DRC Systems India Ltd is a weak quality company, based on a inconsistent multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is DRC Systems India Ltd undervalued or overvalued?

DRC Systems India Ltd appears Fair, as its key valuation ratios are in line with their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 50.8, Historic Median: 73.08. Price to Book, Current: 3.15, Historic Median: 7.16. Price to Sales, Current: 4.59, Historic Median: 7.30. EV to EBITDA, Current: 26.11, Historic Median: 40.85

Q: Is DRC Systems India Ltd a good buy now?

DRC Systems India Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of DRC Systems India Ltd?

DRC Systems India Ltd revenue growth is 18.1% for FY-2025, which is below its 5-year CAGR of 31.28%, indicating slower growth.

Q: Gross Profit margin of DRC Systems India Ltd?

DRC Systems India Ltd Gross profit margin which is the profit after deduction of direct costs, is 17.2% for FY-2025, which is above its 5-year median of 15.3%, indicating increasing margins.

Q: Operating Profit Margin of DRC Systems India Ltd?

DRC Systems India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 16.94% for FY-2025, which is above its 5-year median of 14.88% indicating increasing margins.

Q: Net Profit Margin of DRC Systems India Ltd?

DRC Systems India Ltd Net Profit Margin is 10.05% for FY-2025, is above its 5-year median of 6.53%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 17.2, Historic Median: 15.3. Operating Profit Margin (%), Current: 16.94, Historic Median: 14.88. Net Profit Margin (%), Current: 10.05, Historic Median: 6.53

Q: Return on Asset of DRC Systems India Ltd?

DRC Systems India Ltd Return on Asset is 8.95%, which is above its 5-year historical median of 5.93%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of DRC Systems India Ltd?

DRC Systems India Ltd Return on capital employed is 13.35% for FY-2025, which is above its 5-year historical median of 9.31%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Check Before You Invest : DRC Systems India Ltd

Snapshot

Q.1 Which industry/sub-sector does DRC Systems India Ltd belong to?

DRC Systems India Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.

Q.2 Is DRC Systems India Ltd a good quality company?

DRC Systems India Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is DRC Systems India Ltd undervalued or overvalued?

DRC Systems India Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	50.8	73.08
Price to Book	3.15	7.16
Price to Sales	4.59	7.30
EV to EBITDA	26.11	40.85

Q.4 Is DRC Systems India Ltd a good buy now?

DRC Systems India Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of DRC Systems India Ltd?

DRC Systems India Ltd revenue growth is 18.1% for FY-2025, which is below its 5-year CAGR of 31.28%, indicating slower growth.

Q.2 Gross Profit margin of DRC Systems India Ltd?

DRC Systems India Ltd Gross profit margin which is the profit after deduction of direct costs, is 17.2% for FY-2025, which is above its 5-year median of 15.3%, indicating increasing margins.

Q.3 Operating Profit Margin of DRC Systems India Ltd?

DRC Systems India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 16.94% for FY-2025, which is above its 5-year median of 14.88% indicating increasing margins.

Q.4 Net Profit Margin of DRC Systems India Ltd?

DRC Systems India Ltd Net Profit Margin is 10.05% for FY-2025, is above its 5-year median of 6.53%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	17.2	15.3
Operating Profit Margin (%)	16.94	14.88
Net Profit Margin (%)	10.05	6.53

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of DRC Systems India Ltd?

DRC Systems India Ltd Return on Asset is 8.95%, which is above its 5-year historical median of 5.93%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of DRC Systems India Ltd?

DRC Systems India Ltd Return on capital employed is 13.35% for FY-2025, which is above its 5-year historical median of 9.31%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of DRC Systems India Ltd?

DRC Systems India Ltd Return on equity is 11.43% for FY-2025, which is in line with its 5-year historical median of 11.43%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of DRC Systems India Ltd?

DRC Systems India Ltd Cash conversion cycle is 60 days, in line with its 5-year historical median of 60 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	0.89	0.91
ROE (%)	11.43	11.43
ROCE (%)	13.35	9.31
Cash Conversion Cycle	60 days	60 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of DRC Systems India Ltd?

DRC Systems India Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.01, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of DRC Systems India Ltd?

DRC Systems India Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of DRC Systems India Ltd?

Q.1 Promoter shareholding and pledge status of DRC Systems India Ltd?

Promoters hold 20.63% of the DRC Systems India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does DRC Systems India Ltd performance compare with that of its Peers?

Q.1 Revenue growth of DRC Systems India Ltd vs industry peers?

DRC Systems India Ltd revenue CAGR is 31.28%, compared to the industry median CAGR of 3.17%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	18.1	3.2
Gross Profit Growth (%)	40	18.4
Operating Profit Growth (%)	40	18.8
Net Profit Growth (%)	100	21.9

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	0.89	0.46
ROE (%)	11.43	4.22
ROCE (%)	13.35	6.49
Cash Conversion Cycle (days)	59.69	36

Valuation & price assessment

Q.1 Stock return of DRC Systems India Ltd over the last decade?

Over the last 5 year(s), the stock has delivered a CAGR of 13.64% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	-	13.6%	6.1%	-25.6%

Q.2 Valuation ratios of DRC Systems India Ltd vs historical?

The current P/E ratio of 50.8 is lower than its historical median of 73.08, indicating that the stock is trading below its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	50.8	73.08	47.38
Price to Book	3.15	7.16	2.64
Price to Sales	4.59	7.30	4.79
EV to EBITDA	26.11	40.85	16.75

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Check Before You Invest : DRC Systems India Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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