DCM Shriram (DCMSHRIRAM)

FairStock Score: 61/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Low leverage: debt/equity of 0.30 provides financial flexibility
• Piotroski F-Score of 7/9 indicates solid financial health
• Promoter holding of 66.53% aligns ownership with minority shareholders
• Positive free cash flow of ₹278 Cr and latest quarterly net profit of ₹213 Cr
• Recent sales growth of 13.98% and profit growth of 21.96% show momentum

Concerns

• Valuation is stretched: P/E of 23.15, P/B of 2.68, and Graham number of ₹655.36 imply -58.26% margin of safety
• Moderate returns: ROE of 9.46% and ROCE of 11.37% are too low for such a premium multiple
• Long-term growth is modest: 5-year revenue CAGR is only 7.77%, and PEG of 2.11 suggests growth is already priced in
• Altman Z-score of 2.74 is in the grey zone, while dividend yield of 0.87% offers little downside support

AI Analysis

At ₹1,202.40, DCM Shriram tests my patience more than my conviction. Benjamin Graham taught me to buy with a margin of safety; here, I find none. The company earns just 9.46% on equity and 11.37% on capital, yet the market prices it at 23.15 times earnings and 2.68 times book. My Graham number is ₹655.36—about 58% below the current price—and the DCF estimate of ₹117.62 is even further away. I would be overpaying for a business whose 5-year revenue growth was only 7.77% per year, despite a brighter recent quarter: sales up 13.98%, profit up 21.96%. The balance sheet is respectable: debt/equity of 0.30 and a Piotroski F-score of 7 out of 9 indicate financial stability. Promoter holding of 66.53% keeps key owners aligned with me. Free cash flow is positive at ₹278 Cr, but that is under 2% of market capitalisation and the dividend yield is just 0.87%. Altman Z-score of 2.74 sits in the grey zone, not the comfort zone. This looks like a steady, diversified business, not a compounder. ROE below 10% cannot justify a P/B of 2.68. I do not need to estimate exact value to know that the current price lacks cushion. If the quote fell closer to book value—or at least toward the Graham number—I would study it with much more interest. For now, discipline says wait. There is no reward in buying a fair business at an unfair price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer