DCM Shriram Industries Ltd

Growth Ratio Summary

Growth Score : 8.00

The company's growth ratios show a generally positive trend, with strong growth in operating profit, earnings per share, assets, and net income. The company is expanding its operations and profitability effectively. However, the recent decline in revenue growth rate indicates a potential area of concern. While the company is performing well in terms of profitability and asset expansion, addressing the revenue decline will be crucial for sustained growth.

Financial Ratio Summary

Financial Score : 4.20

The company's financial ratios suggest mixed performance in key areas. While the adjusted earnings per share is average, the cash earnings per share, book value per share, and dividend per share are relatively low. Additionally, the capital expenditures suggest that the company's financial performance has potential for improvement. The company should focus on enhancing its earnings, asset value, and shareholder returns to improve overall financial health.

Profitability Ratio Summary

Profitability Score : 9.80

The company's profitability ratios are generally strong, indicating a solid ability to generate profits. The high gross profit margin, return on capital employed, return on equity, return on assets, operating margin, and net margin suggest that the company is generating profits efficiently. The company is performing well in terms of profitability and is creating value for its shareholders.

Efficiency Ratio Summary

Efficiency Score : 4.33

The company's efficiency in managing its assets reveals mixed performance. While the receivables turnover and receivable days are reasonably good, suggesting effective credit and collection policies, the fixed asset turnover, inventory turnover, days sales in inventory, and capital turnover ratios indicate areas needing improvement. The company may not be generating enough revenue from its fixed assets, and it might be holding onto inventory for too long. Therefore the company needs to focus on optimizing its inventory management and asset utilization to enhance overall efficiency.

Coverage Ratio Summary

Coverage Score : 10.00

The company's coverage ratios are very strong, indicating a robust ability to meet its interest and dividend obligations. The high interest coverage ratio suggests that the company can easily cover its interest expenses with its earnings. The high equity dividend coverage ratio suggests that the company can comfortably cover its dividend payments with its earnings. The company has a strong financial position and low risk of financial distress.

Solvency Ratio Summary

Solvency Score : 10.00

The company's solvency position is very strong, indicating a low level of debt and a high proportion of equity. The low debt ratio and debt-to-equity ratio suggest that the company relies less on borrowing and more on equity to finance its assets. This makes the company stable and less risky. The high equity ratio and low debt-to-asset ratio suggest a solid financial base, reducing the risk of financial distress and enhancing its ability to invest in future growth opportunities.

Liquidity Ratio Summary

Liquidity Score : 3.58

The company's liquidity position reflects some challenges in meeting its short-term obligations. While the current and quick ratios indicate an ability to cover immediate liabilities, the cash ratio is low, suggesting limited readily available cash. The operating cash flow ratio is also relatively low, indicating that the company may face difficulties in funding its operations through cash generated from operations. This means that while the company can generally meet its short-term debts, it might struggle during unexpected financial stress.