DCW (DCW)
CyclicalFairStock Score: 23/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹44.05 |
| Market Cap | ₹1,300.16 Cr |
| P/E Ratio | 27.02 |
| ROCE | 7.93% |
| ROE | 4% |
| Dividend Yield | 0.45% |
| Profit Growth | 203.32% |
| Debt/Equity | 0.27 |
| Sales Growth | 14.19% |
| Promoter Holding | 45.28% |
| 52-Week Range | ₹37.11 — ₹76.35 |
| Sector | Chemicals & Petrochemicals |
| Book Value | ₹36.26 |
Strengths
- Debt/Equity of 0.36 is conservative and provides balance sheet cushion
- Promoter holding of 45.28% suggests reasonable owner alignment
- Book value of ₹35.30 and P/B of 1.27 offer some asset backing
- Sales growth of 9.63% shows top-line resilience despite weak profit
Concerns
- Net profit crashed 63.49%, with latest quarter net profit of only ₹5 Cr on ₹520 Cr sales—a very thin margin
- ROE of 4.00% and ROCE of 7.93% are poor returns on capital
- P/E of 33.78 and PEG of 3.51 are expensive given falling earnings
- Piotroski F-Score of 4/9 and dividend yield of 0.21% signal weak financial health and little reward while waiting
AI Analysis
Let me start with the first test: can this business earn a decent return on capital? DCW fails it. Return on equity is just 4.00% and ROCE is only 7.93%, barely above the cost of capital. In petrochemicals, you live and die by the cycle; right now the cycle is squeezing margins. Sales grew 9.63%, but profit fell 63.49%. The latest quarter tells the story: ₹520 Crore of sales produced only ₹5 Crore of net profit. That is a dangerously thin margin. So I cannot pay a P/E of 33.78 on weak, depressed earnings. A low P/E can be attractive; this is not low. It is high because the E has collapsed. The PEG of 3.51 says the market is paying for growth that is nowhere in the numbers. Book value of ₹35.30 and debt-equity of 0.36 give me some comfort—the balance sheet is not leveraged recklessly, and promoter holding of 45.28% at least ties management to owners. But a reasonable balance sheet does not make an unreasonable price reasonable. Dividend yield of 0.21% means I am not paid to wait. The Piotroski score of 4/9 tells me the financial pulse is weak. This is a cyclical business, not a franchise. I see no strong moat in commodity petrochemicals. The stock trades near the low end of its 52-week range, but a falling knife still hurts. I need evidence that margins have bottomed and ROE can expand toward double digits before I consider acting. Until then, DCW is a value trap risk, not a value opportunity.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer