DCM Shriram’s Q2 results, released on October 30, 2024, reveal impressive year-on-year growth but also underline some potential headwinds. The company reported a substantial 95.16% rise in profit compared to the same quarter last year, accompanied by a revenue growth of 10.79%. Yet, when viewed sequentially, performance was more tempered—revenue grew only 1.86% from the previous quarter, while profit took a significant dip of 37.27%. This suggests that while annual growth remains strong, sustaining momentum may be challenging.
A key factor to monitor is the company’s rising Selling, General & Administrative (SG&A) expenses, up 8.72% quarter-on-quarter, with a slight year-on-year increase of 0.03%. Left unchecked, these rising costs could begin to chip away at future profitability. Operating income also painted a mixed picture, dropping 50.27% from the prior quarter but soaring by 100.25% year-on-year—a volatility that could indicate internal adjustments or external market pressures.
For investors, the 95.17% year-on-year rise in earnings per share (EPS) to INR 4.04 signals long-term potential, though sequential performance trends warrant caution. Over the past week, DCM Shriram’s stock has delivered a modest return of 1.05%. However, its resilience over six months, with an 8.23% return and a 1.65% year-to-date gain, reflects investor confidence.
DCM Shriram’s market capitalization now stands at INR 16,184.29 crore, with a 52-week trading range from INR 832.4 to INR 1210, underscoring a wide span of market sentiment. Despite the robust profit growth, the stock appears overvalued, signaling that a correction may be on the horizon.
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