Why is DCM Shriram Inds falling/rising?

Jul 11 2025 10:14 PM IST
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As of 11-Jul, DCM Shriram Industries Ltd's stock price is declining at 169.45, with a one-year return of -22.85%, significantly underperforming the Sensex. The company faces challenges such as high debt levels and decreasing profits, contributing to negative market sentiment.
As of 11-Jul, DCM Shriram Industries Ltd is experiencing a decline in its stock price, currently at 169.45, with a change of -0.5 (-0.29%). The stock has been losing value for the last two days, resulting in a total drop of -0.62% during this period. In terms of performance against benchmarks, the stock has underperformed significantly over various time frames, with a one-year return of -22.85% compared to a positive return of +3.26% for the Sensex. Despite a relatively attractive valuation indicated by a ROCE of 11.9 and trading at a discount to peers, the company has faced challenges, including a high Debt to EBITDA ratio of 2.72 times, which raises concerns about its ability to service debt. Additionally, the stock's profits have decreased by -12.1%, contributing to its negative performance.

Broader market context shows that while the stock has been underperforming, the benchmark index has seen a slight positive return of +0.52% over the last year. The stock's recent performance is also reflected in its moving averages, which indicate it is lower than the 5-day, 50-day, and 200-day moving averages, suggesting a bearish trend. Furthermore, domestic mutual funds hold no stake in the company, which may indicate a lack of confidence in its future prospects. Overall, the combination of poor financial performance, high debt levels, and underwhelming market sentiment has contributed to the stock's recent decline.
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